(Paris) On January 11, the French food chain E. Leclerc struck hard by announcing that it had “blocked” the price of baguette bread at… 29 euro cents (CAN$0.40) for six months. . The objective: to take “concrete action to defend [le] purchasing power,” read the advertisement.
Posted at 5:00 a.m.
In the week since that announcement aired, an army of shields has risen. The boss of the National Federation of Farmers’ Unions, Christiane Lambert, denounced this decision, which she described as a “political and demagogic coup”. The boss of Lidl France supermarkets, Michel Biero, described the strategy as “irresponsible”. What E. Leclerc is doing is “shameful”, added the president of the National Association of French Milling, Jean-François Loiseau.
“Those who denounce a ‟price too low”, while inflation starts strong again, live on another planet! “, defended Michel-Édouard Leclerc, president of E. Leclerc, on Twitter.
Three weeks before the first round of the presidential election in France, the question of purchasing power still arouses lively discussions, but above all, serious concerns. The cost of the baguette is a convincing example of this, since for many French people it remains a benchmark for the variation in consumer prices.
At the Fournil de l’Amiral bakery, located in the 14thand district of Paris, Mohamed Bechker sells his baguette for 1 euro. Well above that of E. Leclerc. But it is “artisanal”, he hastens to add. If he sells it at a higher price, he fears losing customers. In three years, the baker has increased the price of his baguette by 5 cents. “But by the end of the year, we will still be forced to increase,” he says.
Formerly the product “of the poor”
The price of the baguette is not immune to inflation. According to the National Institute of Statistics and Economic Studies (INSEE), its average price is around 91 cents, but some bakeries have exceeded the symbolic amount of 1 euro, as Mohamed notes. “In the neighborhood, we find it at 1.15 euros,” he points out.
PHOTO FABRICE DIMIER, BLOOMBERG ARCHIVES
The price of the baguette is not immune to inflation, according to the National Institute of Statistics and Economic Studies.
Parisian Angélique Lacquet remembers that the baguette sold for between 65 and 80 cents when she was younger. For the most expensive, she says. “It was a poor man’s product, or at least everyone could afford. Today, it’s made expensive for what it is, ”says the 26-year-old young woman.
In a newspaper interview Le Figarothe president of the National Confederation of French Bakery-Pastry, maintains that the price of the baguette is likely to increase in most of the 33,000 bakeries in France.
The price of wheat, flour, energy, wages, packaging products… All the lights are red.
Dominique Anract, President of the National Confederation of French Bakery-Pastry
According to the most recent INSEE data published in February, inflation has increased by 3.6% over one year in France, the largest since 2008. Costs for all food have increased 1.9%, and 5.6% for fresh produce alone. But it is the price of energy, which has jumped 21%, which further eats away at household wallets.
The controversial marketing of E. Leclerc therefore does not seem inappropriate. According to an Ipsos-Sopra Steria poll carried out in mid-March, one in two French people considers purchasing power to be their main concern (53%), ahead of the war in Ukraine (44%), the environment (26%) , the health system (22%) and immigration (22%).
The battle for purchasing power
The presidential candidates also want to carve out a prominent place in the debate on purchasing power. The left calls for an increase in the minimum wage and a reduction in taxes on certain consumer goods. The right, she wants to cap energy prices, reduce taxes and tax overtime.
In a speech delivered on March 12, the president and candidate Emmanuel Macron outlined his electoral program, which devotes great attention to the purchasing power of the French. He also took the opportunity to praise his government, which has taken “strong measures” (inflation compensation, energy check, gas price freeze) over the past six months to boost purchasing power.
Strong measures, but costly. For 2022 alone, the economist Mathieu Plane estimates the Macron government’s expenditure in this area at 30 billion euros.
Budget balance is no longer a priority. It does not bite as much into public opinion as the question of purchasing power.
Mathieu Plane, economist and deputy director of the French Observatory of Economic Conditions
A study by the French Observatory of Economic Conditions published on March 17, however, shows that purchasing power per household has increased by 0.9% per year under Emmanuel Macron’s five-year term. But this increase does not erase the persistent social inequalities. The study maintains that the purchasing power of the poorest 10% of French people has increased by 600 euros, compared to 2600 euros for the richest households. Like what Emmanuel Macron will not get rid of the qualifier “president of the rich” so easily.