A quick glance at the leaflets that jostle in our mailboxes says a lot about the intentions of distributors this back to school: while the Leclerc catalogs headline “Your super purchasing powers!
", Hypers U promise" low prices "or Auchan which announces" even more savings on your daily shopping ".
The prices of consumer goods down 0.23% over one year
In this month of September still marked by the Covid, the brands are letting everyone know: the defense of the purchasing power of the French remains their number one priority.
Nothing new, you might say.
If it is only this year, the prices of consumer products - food included - are indeed down according to Iri.
This research institute recorded in August a drop in the prices of consumer products of -0.23% over one year and this decline has been accelerating since April.
"We have before us an economic crisis of unparalleled magnitude, so there is obviously a major concern related to purchasing power to which we, distributors, must respond to help our customers ... but also not to lose any", recognizes, with his usual frankness, Dominique Schelcher, the boss of Système U.
Even if they refuse to talk about price wars, the brands are therefore resuming their old habits: bickering over labels.
Gone are the days when during confinement, they consulted each other on a WhatsApp group they had created, or during daily exchanges with the Minister of the Economy, Bruno Le Maire, to decide on the strategy to be adopted.
It was through this, in particular, that they had voted with one voice for a price freeze and for the end of promotions.
Now is the time for everyone for themselves.
"And they will all hit hard: it's going to be catalogs and promotional catalogs, do you want some here?", Announces ironically Michel Biero, the executive director of purchasing and marketing at Lidl France, who prefers to bet on the "fair price" entry "rather than" this escalation of promotions which serves above all to gain market share ".
Each brand pursues its own “price” strategy ...
A quick stroll through the aisles of hypermarkets confirms this profusion of promotions.
School supplies are in the spotlight these days, and discounts - loyalty or immediate - are around 50%, even 70%!
Ditto for diapers - a big budget for families - or laundry.
"There is a real desire to display low prices, including for food," says Élisabeth Cony, founder of Ms. Benchmark and expert in retailer commercial action plans.
In food, discounts are certainly capped at 34% in value - Egalim law requires -, but the brands multiply them, and compete in imagination.
“In addition to classic promotions, we are going to increase the share of free admission,” explains Dominique Schelcher.
For example, instead of "2 bought, 1 free", it will be "3 bought, 2 free".
The "unbeatable" of Carrefour.
LP / Delphine Goldsztejn
In addition to the promotions, the brands are also engaged in a battle on "the bottom of the shelf", all these items which are not placed at the head of the gondola but on which they want to make a difference.
Intermarché launched hostilities this summer, announcing that it had lowered the price of more than 1,250 products.
Monoprix for its part will reposition downward "the price of a hundred everyday products, mainly private labels (private labels), from September 3": this superior cooked ham thus drops to 1.89 euros for 4 slices , a reduction of 5%, and these 3 Max Havelaar milk chocolate bars are at 1.99 euros, down 9.1%.
As for Carrefour, with its “unbeatable”, it intends to “guarantee the lowest prices” on “500 branded products, but also in hypermarkets for small household appliances”.
And if you find it cheaper elsewhere, the brand will reimburse you twice the difference.
Not enough to scare the market leader, Leclerc: “I could make you big media announcements.
But no need to outbid: consumers know which brands have the best offers, smiles Michel-Edouard Leclerc.
We are already the cheapest, we want to stay that way and guarantee the gap with our competitors ”.
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Finally, distributors particularly pamper loyal customers.
Just like Franprix which, last weekend, offered holders of its house card a voucher corresponding to 50% of the value of their basket!
The Leclerc brand will also strengthen the generosity of its loyalty program.
“In particular on agricultural products and fresh products,” announces Michel-Edouard Leclerc.
We have heard from our suppliers, farmers and ranchers, who do not want prices to be cut.
To return part of the amount of their purchases to our customers, we will therefore use our margins.
"Dominique Schelcher, who sells 50 daily products and 6 fruits and vegetables" at cost price ", does not say anything else:" giving up our margin allows us to buy these products at a good price from the producer and to offer them to a good price to our customers.
"
... while swearing to spare the quality and the producers
Promised, besides assure all the other distributors in chorus, to finance these "gestures" in favor of the customer, one will not sacrifice the agricultural world.
"It's about offering the right price for the customer, but also for the producer, by placing the consumer's interest at the top of my priorities", explains Rami Baitieh, the new boss of Carrefour France.
A generosity made possible to date by the fact that the turnover of large-scale distribution has been better than expected in recent months, due to the confinement and the closure of restaurants.
But the return to normal is looming.
So, distributors could go back to pressurizing industrialists and producers to obtain better prices… at the same time relaunching a price war that “destroys value”, underlines Michel Biero.
“The brands follow what others are doing.
If Intermarché lowers its prices by 30% on a product, Leclerc will do it too, U will follow, and in the end, the price will collapse, ”warns the leader of Lidl.
The risk is clear: that this movement worsens the deflation of which we are already seeing the beginnings.
An example of promotion on quantity.
(Illustration) LP / Aurélie Ladet
The price again, the price always, of course.
"But if it were the only criterion, there would be in France that discount brands", tempers Frédéric Valette, director of the distribution division at Kantar.
"The price is of course important, also recognizes Rami Baitieh of Carrefour, but the quality of the product, the French origin or the service rendered are also important".
Frédéric Valette goes even further: "the price is a
non-differentiating prerequisite
, that is to say that it remains essential but is not enough, on its own, to trigger loyalty", continues this expert, who quotes, among the other criteria “loyalty cards, waiting time at checkout, cleanliness of the store, in short, everything called the customer experience, but also the fact of offering beautiful fruits and vegetables for example ".
It could not be better said that the war between the big distributors between them to keep their customers and to gain new ones has and will take place on several fronts at the same time.