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Escalating a showdown by French retailers to name and shame brands that aren’t reducing prices as inflation eases, Carrefour last week moved to stop selling PepsiCo products in its stores in France, Belgium, Spain, and Italy.
According to multiple reports, signs next to the exiting brands — including Lay’s, Quaker Oats, Lipton, and PepsiCo’s namesake soda — began arriving in stores last week, reading, “We are no longer selling this brand due to unacceptable price increases.”
The move from Carrefour comes as Europeans continue to face high food inflation due in part to Russia’s invasion of Ukraine. In France, food prices rose 7.1% year-over-year in December. Price increases peaked in March 2023, surging 15.9%.
The French government has threatened to penalize or publicly shame suppliers that are reluctant to renegotiate lower prices with grocers amid declining prices of oil, transportation, food ingredients, and other raw materials.
“We have large companies that are jacking up the prices of some of their brands, and we want to get them around the table again and achieve price decreases as quickly as possible,” France’s President Emmanuel Macron recently said, according to The New York Times. “It is intolerable to see so many households having to make choices about essential goods.”
Part of that campaign includes shaming brands that engage in the practice of shrinkflation, or downsizing food packages while maintaining prices.
Suppliers have claimed that the elevated prices reflect the still high costs of ingredients and labor. However, many of those companies have also “reported expanding profits as they sell fewer items at higher prices.”
PepsiCo explained in a media statement that the company has “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.”
In 2023, pricing disputes led German grocer Edeka to halt sales of Mars and PepsiCo products, and Belgian supermarket Colruyt pulled Mondelez products. In 2022, U.K.-based Tesco temporarily pulled Kraft Heinz products due to high prices. In 2009, Costco made waves by briefly refusing to stock Coke products amid pricing negotiations, but such moves are rare in the U.S.
Randall Sargent, a partner in consultancy Oliver Wyman, told the Washington Post that yanking products is more common in Europe in part because private-label alternatives are more readily available. Sargent said that U.S. retailers were more likely to use unfavorable shelf placements or less promotion to incentivize brands to reduce prices.
In the U.S., food-at-home prices increased only 1.7% on a year-over-year basis in November, steadily decelerating after jumping 11.4% overall in 2022, according to the U.S. Bureau of Labor Statistics’ Consumer Price Index. Surveys show, however, that many U.S. consumers are frustrated that food prices for many items remain well above pre-pandemic levels.
Grocers in the U.S. continue to express concerns about rising food prices despite moderated inflation. Walmart CEO Doug McMillon told analysts in November, “The pockets of disinflation we are seeing are helping, but we’d like to see more faster, especially in the dry grocery and consumables categories.”