Food inflation falls for 7th month in a row, while e-commerce a “big winner” in France

November 21, 2023

According to a new report by Kantar, e-commerce is now “the big winner” across grocery retail in France, now occupying its third highest level after September 2023 (10.5%) and April 2020 (10.4%). Food inflation has also fallen for the seventh month in a row, pointing to an improving economic picture in France and across Europe.

The study looked at P11 – the period between October 2 – 29, and found that a fifth of French households (20%), or 5.7 million households, devoted 47% of their monthly grocery budget via e-commerce alone.

French online hypermarket E.Leclerc Group represented 23.7% of French spending in October (+1.8pt in Pdm value), in what it called “a spectacular gain in market share” that the brand had experienced only once before, during the exception 2020 periods, just after the first Covid-19 lockdown.

The brand’s customers were more numerous (+596,000 households) in October 2023 and devoted 55% of their PGC FLS shopping expenses to E.Leclerc (+1.5pt vs October 2022).

Meanwhile, French retailer Les Groupement U captured 11.8% of spending, an increase of +0.3pt via all its channels: Supermarkets and Hypermarkets, Convenience and Internet stores. Groupement les Mousquetaires gained +0.3pt at 17.0% of market share value via its Intermarché and Netto brands.

Food inflation down for seventh month in a row

In other, but related news, French market researcher Insee has reported that food inflation has fallen for the seventh month in a row, pointing towards a potentially improving economic outlook in France and Europe more broadly.

The report said that year on year, food prices rose by 7.8% in October 2023, after a 9.7% rise in September.

Food inflation falls for 7th month in a row, while e-commerce a "big winner" in France

It said that, excluding fresh products, the year-on-year rise in food prices softened (+9.1% after +10.6%), notably for bread and cereals (+9.4% after +10.9%), meat (+6.8% after +8.3%), milk, cheese and eggs (+11.2% after +13.5%), oils and fats (+5.8% after +7.8%), sugar, jam, honey, chocolate and confectionery (+12.6% after +14.0%), alcoholic (+6.5% after +7.3%) and non-alcoholic beverages (+9.9% after +11.1%).

The prices of fresh products also rose in October 2023 at a less marked rate (+1.1% after +4.5% in September), slowed by the downturn in fresh vegetable prices (‑5.8% after +3.2%), while the prices of fresh fruits (+4.7% after +4.2%) and fresh fish (+1.5% after +0.1%) accelerated.

Strong slowdown in energy prices year on year

Elsewhere, but having potentially significant implications on prices and inflation in the grocery market, an Insee report, noted that year on year, the prices of energy increased by 5.2% in October 2023, after a rise of 11.9% in September – a notable drop in inflation.

The prices of gas declined year on year (‑5.5% after +7.6%), as well as those of solid fuel (‑8.4% after +6.1%), mainly due to base effects (they had increased significantly in October 2022). The prices of petroleum products slowed down sharply (+1.8% after +10.7%), partly due to similar effects: prices decelerated for petrol (+13.5% after +25.9%) and diesel (+1.6% after +10.0%), while they declined more markedly for liquid fuel (‑16.2% after ‑10.5%).

Conversely, the prices of electricity accelerated year on year (+18.5% after +16.1%).

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