Global supermarket chain Carrefour will stop selling PepsiCo products in its stores in France, Belgium, Spain, and Italy. The problem? The brand’s rising costs.
Grocery chain Carrefour pulled PepsiCo products from shelves in France on January 4. Workers added small signs in stores that say, “We no longer sell this brand due to unacceptable price increases.”
The French furor is over PepsiCo’s price increases for popular items like Lay’s potato chips, Quaker Oats, Lipton Iced Tea, and its namesake soda.
New French rules are meant to fight the rising cost of living. Supermarkets face large fines if they don’t reach pricing deals with suppliers by January 31.
The PepsiCo ban will soon extend to Belgium, Spain, and Italy. Carrefour has more than 12,000 stores in 30 countries. The chain hasn’t yet said when the ban takes effect outside France.
PepsiCo products were still on shelves Friday in Rome, Italy, and Barcelona, Spain. Carrefour Italia’s press office says information will be posted for customers in Italian stores in the coming days.
PepsiCo has “been in discussion with Carrefour for many months,” according to press releases. The company says it “will continue to engage in good faith in order to try to ensure that our products are available.”
PepsiCo’s profits are up. The company behind Cheetos, Mountain Dew, and Rice-A-Roni has raised prices by double-digit percentages for seven straight quarters. But the higher prices have also decreased sales as people switch to cheaper brands.
The government of French President Emmanuel Macron has fought back on the rising cost of living. It passed “emergency measures” to combat high prices in November.
Burt Flickinger, III, is managing director of a U.S. grocery consultancy group. He thinks Carrefour targeted PepsiCo because the company has been one of the most aggressive in raising prices. He thinks other big brand names could be next—and that other European retailers might follow suit.
Food expert Rob Dongoski says the showdown between PepsiCo and Carrefour represents the ultimate test of customer loyalty: “Are you loyal to your store or loyal to your brand?”
In the United States, several grocery sellers, including Walmart, have expressed displeasure at product companies’ moves to keep inflating prices even as the economy recovers. Packaged foods and household goods seem to be major offenders in this area.
The United Nations says its food price index (a key sign of food cost trends) was lower in 2023 than the year before. But families at supermarkets aren’t feeling relief.
Walmart CEO Doug McMillon says, “We all need those prices to come down.”
