'Shrinkflation' Shame!: French Supermarket Carrefour Targets PepsiCo, Unilever and Others By Issuing Price Alerts

Carrefour CRERF CRRFY has taken a proactive stance by issuing price alerts on several products as a strategic move to exert pressure on leading consumer goods suppliers such as Nestle SA NSRGF NSRGY, PepsiCo Inc PEP, and Unilever Plc UL to combat inflation in anticipation of forthcoming contract negotiations.

Carrefour is affixing labels to products that have undergone downsizing while their prices have increased, even after a decline in raw material costs. 

This action aims to garner consumer support as retailers brace themselves for negotiations with some of the world's largest brands, set to commence soon and conclude by October 15.

Carrefour has marked 26 products in its French stores with labels stating, "This product has seen its volume or weight fall, and the effective price by the supplier rise." 

Finance Minister Bruno Le Maire supports this stance and, in June, summoned 75 major retailers and consumer groups to his ministry, urging them to lower prices. 

Following another round of meetings last month, Reuters noted, Le Maire stated that Unilever, Nestle, and PepsiCo were among the companies not adhering to the price reduction initiative.

Consumer groups argue that "shrinkflation" is widespread, with supermarkets like Carrefour engaging in it with their private label products.

The shrinkflation warnings are displayed in all Carrefour stores in France and will continue until the targeted suppliers agree to reduce their prices. 

While the retailer may extend these warnings to other products, there are no plans to expand this initiative to other countries.

Le Maire announced last month that consumer goods companies and retailers had agreed to advance annual price negotiations to September, which typically take place next year. These negotiations will result in price reductions starting from January.