Carrefour, a leading supermarket chain in France, has made a significant move by refusing to stock PepsiCo products, citing their excessive cost. This decision affects Carrefour’s extensive network of over 9,000 stores spanning France, Spain, Italy, and Belgium. The chain has placed signs in its stores attributing this move to “unacceptable price increases.”
This development marks the latest instance in a series of disputes between European supermarkets and major grocery producers, exacerbated by the ongoing cost of living crisis following Russia’s war with Ukraine. The crisis has led to surging wholesale costs for energy and various commodities, forcing producers to increase their prices. This situation often results in ‘shrinkflation’, a tactic to limit price increases by reducing the size of products.
Carrefour has previously alerted customers to products that had decreased in size but increased in price. Meanwhile, suppliers to UK supermarkets continue to face scrutiny under a Competition and Markets Investigation. Grocery inflation is reportedly higher in France than in the UK, and despite government attempts to negotiate price reductions with brands, success has been limited.
The decision by Carrefour impacts not just Pepsi’s flagship soft drink but also other popular products like 7up, Cheetos, and Lay’s crisps. Reuters reported that some of these products were already unavailable to customers in Paris. Shoppers like Edith Carpentier have expressed little surprise at the boycott, noting that many expensive items are non-essential and could be left unpurchased.
In response to this situation, PepsiCo, which has thrice raised its profit forecast for 2023, stated, “We’ve been in discussion with Carrefour for many months and we will continue to engage in good faith in order to try to ensure that our products are available.” Last year, PepsiCo had warned of “modest” price increases for 2024.
Carrefour’s decision reflects the broader challenges facing retailers and consumers alike as they navigate the complexities of the current economic climate, particularly in terms of managing costs and pricing strategies.
