Retail prices in France will not fall significantly before March, the boss of supermarkets group Les Mousquetaires said, echoing a warning by a rival group that French consumers were spending less due to the high cost of living.
Thierry Cotillard, whose group has more than 3,000 stores in France, is among retail executives due to meet finance minister Bruno Le Maire on 30 August to discuss how to lower prices.
Ahead of the meeting, Cotillard told RTL radio that French consumers had cut their shopping at supermarkets by around 5% in terms of volume, and were buying fewer fresh products like fish and meat, adding he saw "no improvement" in the overall level of prices before March.
"It's a real concern as the French are consuming less ... It's not good for the economy, it's not good for business," he said.
"We are seeing more falls in the prices of raw materials than rises, we had oil and wheat and now paper. Retailers are passing on those falls to consumers with their own private-label brands, but the law does not force national brands to renegotiate their prices. Some are playing ball but others don't."
Earlier, the CEO of French retailer Carrefour warned that high prices have forced consumers to make massive cuts to spending on essential goods, and urged the government to delay a law putting a cap on promotions retailers can offer.
In a letter to lawmakers this week Bompard - who is also president of retail industry lobby group Federation du Commerce et de la Distribution - said sales of menstrual products, nappies, and first aid treatments had been falling, pointing to this as evidence that French families are unable to afford basic items.
Food Inflation
As Europe's inflation shock eases, France is seeing less of a retreat in prices than other countries due to a surge in food inflation which stood at more than twice the overall French inflation rate of 5.1% in July.
Earlier this year Britain's competition watchdog said it would step up work looking into grocery prices, although supermarket executives have rejected allegations they were profiteering through a cost of living crisis.
High food prices are a concern for all European governments, with retailers and consumer goods groups trading blame on who is responsible for the high cost of living.
Italy has been trying to negotiate an agreement between producers and retailers to cap prices of food and other essentials from October to December, though sources said earlier this month producers had refused to submit to a deal with supermarket chains to ease inflation.
In Hungary, Prime Minister Viktor Orban has imposed mandatory price cuts on some basic food items. And in Portugal, the government announced in March a package to help low-income families, including scrapping value added tax on essential food products.
Le Maire said in June he had secured a pledge from 75 top food companies to cut prices on hundreds of products from July to reflect lower raw material costs. But a junior minister said last month that only about 40 had made good on their promise.
A top executive a discounter Lidl France said Wednesday's meeting with Le Maire was constructive.
"Retailers share the same perspective on the situation and were in agreement during this morning's discussions with Bruno Le Maire, who is making strong commitments," said Michel Biero, executive director of purchasing and marketing at Lidl France.
He did not elaborate further. Retailers have called for more regular price negotiations with consumer good companies to reflect changes in the price of raw materials.
By law, the window for those negotiations in France is set between December and March every year, and this year agreed on a 10% increase on the price of products in supermarket shelves.
Critics say the system effectively locks retail prices for one year, regardless of fluctuations in commodities and other input prices.
Retailers have also criticised a law passed earlier this year which extends a cap of 34% on promotions they can apply to food items to beauty, hygiene and care products.
Bompard at Carrefour has called on the government to delay implementation of the law, which is currently due to take effect in March 2024, by one year.
