E.Leclerc’s rates are close to the average price offered by all French brands. The group adopts a new strategy to try to stay in the competition. “At E.Leclerc, you know you’re buying cheaper.” The French retail chain is going to have more and more trouble meeting the promise of its slogan. Indeed, the Dauvers and Linéaires editions, as well as the observatory A3 Distrib, a specialist in price monitoring in supermarkets, reveal that the price differences between E.Leclerc and its competitors are narrowing. For example, while Michel-Édouard Leclerc’s banner was 6.7% lower than the French average on January 31st, the difference fell to 5.8% on February 20th, an increase of 0. 9 points. In technical terms, E.Leclerc’s price index, which is used to measure the level of its prices, was 93.3 on 31 January against 94.2 on 20 February. The value 100 corresponding to the French average, all signs combined.

“This evolution of the price indices is a consequence of the Food Law that came into force on February 1st,” explains Olivier Dauvers, a distribution specialist, contacted by Capital. “It forces distributors to market their products by at least 10% in order to better pay farmers with the surplus,” he adds. No more sales at low margins or at a loss. In fact, discount supermarkets are the first affected and have no choice but to increase some of their items (5% to 10% of the total supply for E.Leclerc). Thus, the average national price of all brands increases and the gap between the most competitive and their more expensive rivals weakens.

Source: capital.fr