Grocery Chain Carrefour Stops Selling PepsiCo Products

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Facts

  • Carrefour, a major global grocery chain, announced to consumers on Thursday that it was pulling multiple PepsiCo products from its stores in France, Italy, Belgium, and Spain. The supermarket franchise said this was due to PepsiCo's 'unacceptable price increases.'1
  • In light of the rising cost of food in Europe, Carrefour has declared it is 'committed to lowering prices.' Following months of unsuccessful talks, the retailer will start taking PepsiCo brands such as Lipton tea, Doritos, Lay's potato chips, and soft drinks off its shelves. Items will not be restocked once they are sold out.2
  • By de-listing Pepsico, Carrefour is stepping up its efforts to pressure some of the world's largest consumer goods producers to lower their prices. Costs rose during the previous two years reportedly because of labor, energy, and other factors.3
  • Pricing battles are nothing new for Carrefour. As one of Europe's most assertive retailers, the French multinational company started an anti 'shrinkflation' campaign last year, warning consumers with shelf labels that manufacturers had reduced the size of products but were still selling for the same price.4
  • In October of last year, PepsiCo indicated that pricing increases will essentially follow inflation. Regarding the issues with Carrefour, a PepsiCo spokesperson said the company will 'continue to engage in good faith to try to ensure that our products are available.'5
  • Carrefour's decision to de-list PepsiCo brands comes as the French multinational plans to expand its private label from 33% in 2022 to 40% of food sales in 2026, according to a strategic document published last year. Shifting from famous brand names to the stores' private labels is another strategy for the retailer to potentially lower prices.2

Sources: 1Guardian, 2Washington Post, 3CNN, 4Business Insider and 5Bloomberg.

Narratives

  • Narrative A, as provided by BNN Breaking. Europe's consumers are going through one of the worst cost-of-living crises in decades. Many governments, particularly the French, have made it a priority to try to lower food prices and have called for an early end to the yearly negotiations between retailers and suppliers. As a result, Carrefour's decision to de-list PepsiCo brands from its store because of its unacceptable price increases sends a strong signal to other manufacturers not to pass on unnecessary price hikes to consumers.
  • Narrative B, as provided by Le Monde.fr. Carrefour's decision to discontinue carrying PepsiCo goods is a daring one. French retailers are still negotiating with the food industry, so the action may be just an aggressive tactic to get PepsiCo to give in to its demands. However, there's also a chance the strategy won't work if customers switch to a competing store because Carrefour doesn't stock their preferred PepsiCo brand.

Predictions