“We will not return to 2019 prices,” warns Michel-Édouard Leclerc

At the start of the year, he wanted to “crack down on inflation” but prices are still rising. Guest of the RTL-Le Figaro-M6 Grand Jury this Sunday, the president of the strategic committee of the Leclerc group, Michel-Édouard Leclerc explained that we “will never return to 2019 prices.” While the consumer price index has increased by “21% in two years in food”, the representative of the number one hypermarket and supermarket in France denounces a speculative inflationary cycle. “In this inflation, half was used to rebuild the margins of large companies,” he indicated, citing a report from the General Inspectorate of Finance.

According to him, this cycle, after ten years of deflation, could have been avoided if manufacturers had negotiated energy prices earlier and processors, those of raw materials, pointing out a lack of anticipation. The inflation of recent months, which he considers “abusive”, because “no one can explain the 40% on a packet of pasta” is giving way to a “more structural” rate of price increase today. Shaped by something else, which he calls “the new economy”. That is to say, the ecological transition, the search for relocation, control of supplies and decarbonization. All these factors explain “that it will cost more to produce in France. We will never go back.” From now on, manufacturers will have “more random depreciation.”

“In the second quarter of this year, inflation will become more reasonable,” underlined Michel-Edouard Leclerc. According to him, the big brands “lost a lot of volumes last year and will be more accommodating” in 2024. The last period of commercial negotiation between distributors and suppliers, which had been brought forward to January instead of March, “we allowed us to negotiate well,” he said. Food inflation should therefore remain “between 2 and 3% this year”. On cereal-based products for example, taking into account the fact that the prices of this raw material have fallen by 28.4% in 2023 on world markets, it will be necessary to wait “for new orders to be placed” for the prices to apply on the shelves.

On the aspect of commercial negotiations, the representative of mass distribution called for them to take place several times a year. “We must remove this French specificity of only negotiating once a year (...). We are competing with the whole world, Walmart, Amazon... to buy the cheapest products,” he explained. We negotiate on a global scale so isolating France makes no sense.” Asked about the floor price, an idea drawn up by Emmanuel Macron during the agricultural crisis during the Agricultural Show and which aims to set a minimum purchase price for producers, the representative of Leclerc believes "that deciding on a price without having the sale, that does not constitute remuneration.” According to him, it is not up to the law to set prices, but to inter-professional organizations, in order to take into account the diversity of producers.

To respond to the anger of farmers, who are demanding better enforcement of laws meant to protect their income, the government promised more controls. Was the promise kept? “Yes, as soon as we have finished a negotiation, the administration comes to check,” replied Michel-Édouard Leclerc, specifying, to the journalists, “you would be controlled like us, that would give you pimples.” The fact remains that “distribution buys very little from the farm,” he defended. “I am willing for large-scale distribution to bear all the ills of the earth, I accept a part of the responsibility, but the main outlets for French agriculture are not distribution, it is catering, they are the wholesalers... Who are not subject to the Egalim law.” The bottle of milk, “I buy it from Danone or Lactalis and the price they pay to the producers, I don't know because in the law, which is very hypocritical, there is an option where the manufacturer does not I don’t have to say it.” According to him, the scope of the law should be broadened.