What are our supermarket chains waiting for to freeze prices?

The price of the grocery basket fuels conversations both at home and on the other side of the Atlantic. But European consumers are entitled to a boost that is not observed here. Their large supermarket chains are multiplying strategies to reduce bills.

In early June, Carrefour launched the anti-inflation challenge by offering a basket of 30 essential products at 30 euros ($40). At the end of August, the company blocked the prices of 100 essential products for 100 days in order to “support the purchasing power of the French”. There is also the “tight prices” operation: Carrefour undertakes “to reduce its margins” so that the price of 200 of the most popular national brand products does not move, or almost does not.

Its competitor E. Leclerc has created an “anti-inflation shield”. Its customers are credited to a card to be used next time when they purchase certain everyday products whose prices rise. Lidl offered coupons giving 5% off all purchases, once a month.

Naturalia organic grocery stores offer 10% discount on all their shopping to customers who pay a subscription at 5.90 euros per month. “Through this system, Naturalia is trimming its margin [de profit] so that this effort does not weigh on the producers”, specifies its advertisement.

There are also one-off offers that strike the imagination, like that of Auchan which sold the Ariel laundry soap for 1.21 euros, rather than 12.09 euros. A saving of 90%. Intermarché has instead removed products that have become too expensive from its shelves, the most recent example being water bottled by Danone (Evian).

You will have understood that there is no shortage of ideas to seduce financially strangled consumers. Empathetic messages and price freezes have also been announced by some chains in the United States and Australia.

Meanwhile, in Quebec, it is quite the opposite.

If you believe that there are fewer discounts in our large supermarket chains, your sense of observation is not playing tricks on you.

This is indeed the case.

The NielsenIQ Canada database, which contains the actual sales, for each product, of all supermarkets in the country, confirms this. Promotions are becoming rarer, so consumers are putting fewer sale items in their basket. This is the first time that a decrease has been observed since 2008, and it was not expected. “It’s a big surprise,” said Francis Parisien, senior vice president of sales (SME) for the consumer data analytics firm.

Compared to last year, discounts are lower in six of the eight product categories.

That’s not all. Sales are also less attractive than last year. Their amplitude decreased by about 10%.

“Currently, no sign gives us the feeling of understanding consumers,” observes Luc Dupont, professor specializing in marketing and brand image at the University of Ottawa.

Consumer distrust of the three major Canadian chains – Loblaw (Provigo and Maxi), Sobeys (IGA) and Metro (Super C) – should come as no surprise.

Their advertising messages ignore reality. It’s as if the 10.8% increase in the grocery basket in August was not a major issue for their customers. It’s as if the supermarkets had no role to play, they were just helpless spectators.

Admittedly, small Quebec independents have started to play with their margins to reduce prices, as my colleague Nathaëlle Morissette wrote, but this remains marginal.

Our three giants, who collect 60% of all the dollars spent on groceries in the country, must also tighten their belts temporarily.

As food distribution expert Sylvain Charlebois of Dalhousie University wrote on Twitter, “It makes good PR, it’s easy and it would show that [les chaînes ont] of the heart “.

And our supermarkets have the means to show their customers as much consideration as anywhere else in the world.

Just look at their financial statements to be convinced. The closure of restaurants at the start of the pandemic caused sales to jump and, to a lesser extent, profits (operating costs rose). For the past year, inflation has had the same positive impact. Gross and net profit margins, as well as other ratios used to measure performance, have been stable or increasing for years.

In summary: the last two years have been very lucrative. Shareholders know it, and they have taken advantage of it. Customers now need bold and unprecedented measures to deal with an exceptional situation.