The context
From grocery to specialised trade, all retailers are facing a generalised cost increase. They have never seen as many price increases during the year as in 2021. Some, like Adeo, Kingfisher and Action are particularly suffering from price inflation. However, many have yet to pass on increased costs to end consumers. In the food sector, everyone is watching the market and waiting to see who will be the first to raise prices and to what extent. Previous prices were based on two factors; alignment with the competition plus an overall margin rate. Now retailers must make strategic choices in a context of great variability and uncertainty.
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Unequal categories. Inflation varies by category. As more products are linked to imports, the greater the impact is. This is the case for products made in Asia, with a lot of plastic, such as garden sheds, which have an unfavourable price-to-bulk ratio. With containers at €20,000 between Asia and Europe, the cost of transportation per unit has soared. Large appliances (fridges, washing machines…) and electronic components are also affected. In food, the price of cereals is soaring due to war in the breadbasket of Ukraine. Eggs and poultry are also affected, with 10 million chickens slaughtered in France since November 2021 under bird flu restrictions.
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Key figures
-USA: inflation reached 7.9% in February 2022. In 2021, this measured 7% in total, including 6.1% for food products
-Eurozone: inflation is estimated at 7.5% in March 2022, with a particularly high impact on energy (up by 45%) and food (up by 5%). Headline inflation will reach 11.9% in the Netherlands, 9.8% in Spain, 9.3% in Belgium, 7.6% in Germany, 7% in Italy and 5.1% in France (Eurostat).