The conflict between Russia and Ukraine amplifies the rise in prices of consumer products on the shelves. Result, an increase in labels of 5% on average, is expected next month. But some will fly away even more.
Household wallets are expensive. The sharp rise in prices recorded since the beginning of the year accelerated with the war in Ukraine. As a result, gas, electricity and oil prices soared. All the indicators are bright red, like the prices at the pump which are bordering on, even exceed 2 euros per literwith a barrel of crude above 100 dollars.
On arrival, the energy bill of the French is likely to climb by 400 euros in 2022 even if for the moment, the State freezes the prices of gas and electricity. No wonder in this context that the presidential candidates focus on proposals related to purchasing power. Moreover, the executive is thinking about setting up a new inflation bonus, tighter than the previous one. 100 euros grants 38million people.
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A 3% increase before the war
But another front threatens the household budget: it concerns grocery shopping. Indeed, Ukraine and Russia are major producers of agricultural raw materials such as wheat, maize or sunflower. And the conflict between the two countries is driving up prices. With consequences that will be felt very quickly on the shelves of stores in France.
Even before the start of the conflict in Ukraine, we had expected an increase in 3% on average, over one year, consumer products from April following the latest trade negotiations between manufacturers and distributors. The rise in energy costs, the climatic vagaries that have affected the harvests of food raw materials throughout the world in recent months in particular, have led food prices to rise sharply. Corn the war amplifies this scenario, explains MoneyVox Emily Mayer, of the specialist firm IRI. According to the latest statement for the month of February, pasta, for example, saw its prices climb by 13% over a year. But the deal will get worse.
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From 3% to 5% on labels
We would expect the inflation hump that we are positioning 3% to reach 5% on consumer productsas during the 2008 crisis, with very marked increases on certain cereal-based products such as pasta, flour, bread, pastries, due to the rise in wheat prices for example, warns Emily Mayer. But that’s not all.
Insofar as Russia and Ukraine represent 78% of world exports ofsunflower oil, we can also expect clear increases for this product, the most consumed among oils in France (37%). Also expected, a side effect on other types of oils, which could become more expensive if consumers decide to switch to them.
Increases in the prices of cereals, but also of fertilizers, fuels and energy will have an impact on the production costs of farmers, who will have to pass them on to pork or poultry meat. On the creamery (milk, butter, cheese…) also since the cows also consume wheat and barley produced in large quantities by Ukraine and Russia.
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12euros more per month for food
A four-person household spends an average of 549 euros per month on food, analyzes Christiane Lambert. Inflation alone adds +5.39 euros. L, with the Ukrainian crisis, it will be necessary 10 12euros more per monthcalculates Christiane Lambert, the president of the National Federation of Farmers’ Unions (FNSEA), questioned by The Parisian.
In concrete terms, the increases will be proportionally higher for low-cost brands and distributor brands, the cost of which is mainly linked to the raw material. In light of past inflationary periods, Emily Mayer anticipates that consumers buy less and cheaper by favoring discount stores such as Lidl or Aldi, brands offering the best offer in terms of price.
Consumers could also reduce purchases of less essential products (beauty products, sweet products, alcohols) and give priority to home-made raw products. Organic products, more expensive than conventional products, could also be affected by the trade-offs that the French will have to make, continues Emily Mayer.
A study published this week by the firm Kantar confirms this scenario. In a context of high inflation, 44% of individuals want to favor home-made and 38% plan to buy more under promotion.
Consumers also intend to shop at the cheapest stores near them. Lidl, Aldi, Leclerc, Intermarch, U or even Carrefour – which has improved a lot in its price image – should have the wind in their sails in 2022, estimates this survey which polled nearly 13,000 households.
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