For Michel-Edouard Leclerc, “inflation generates enormous frustration”

For Michel-Edouard Leclerc, "inflation generates enormous frustration"

He made a name for himself defending the purchasing power of his clients. Michel-Edouard Leclerc, president of the strategic committee of the E. Leclerc centers, has been instrumental as receipts have been at the forefront of French concerns. The brand recently published a study that focuses on the worrying consequences of inflation for those under 30, the starting point of the interview he gave us.

According to the latest study by the Leclerc New Consumption Observatory, 49% of young people between the ages of 18 and 30 are pessimistic about the evolution of their purchasing power. Are you also pessimistic?

Michel-Edouard Leclerc: I am combative and creative. And I think it has to be because it is going to shake the purchasing power of households quite a bit, but also, consequently, of companies. Recession must be avoided at all costs and I feel it is my duty to help companies out of this crisis. Distributors have a social utility to promote.

Those under 30 seem especially affected. Also in your study, one in three young people affirms that he regularly skips meals due to lack of resources… Do you notice these difficulties in the box?

Yes, the increase in precariousness translates into highly visible behavior in stores. It is obvious, we see the poorest young people looking for first prizes whose presence had greatly diminished on the shelves. And that’s why, in addition, we put all our first price ranges back on the disc. It is often said that the older generation was fascinated by brands, sometimes to the detriment of their purchasing power. Nowadays, the younger generation is very pragmatic. You have no complexes to buy a first price product.

However, it is also a generation committed, in particular, to a healthier and more environmentally friendly diet…

Buying a cheap product is not synonymous with giving up quality food, but yes, it is a generation that has these aspirations and does not always have the means to put them into practice. As a result, this results in enormous frustration.

You feared a very turbulent social comeback. Does it arise from this frustration?

Beyond youth, it is society as a whole that must be analyzed. The climate of this return to school is dominated by the desire rediscovered during the holidays to fully live a mobile and Covid-free life. But unfortunately ! The public and media discourse focuses on two announced crises, inflation and energy. We are immersed in this climate of anxiety and there are not many ways out for the poorest.

Do you have a role to play in this sequence?

Let’s just say it challenges me and empowers me. So I ask my colleagues at Leclerc, but also all entrepreneurs, to take action. Because there are many things to do. We are going to have a difficult winter. Before consumers receive precautionary measures, it is up to us to be exemplary and better control our consumption because it is the companies that consume the most.

What do you plan to do on your side?

As for lighting, heating or even the regulation of heat flows, Leclerc will take a fortnight of measures even before the arrival of winter. It is a sobriety plan that, if carried out well, can reduce consumption by the equivalent of some 24,000 households. Also, it is our interest. An average hypermarket has an energy bill of €500,000. With the next increase in electricity costs, this could triple by 2023.

And against the other crisis, inflation?

Today, manufacturers try to get us to raise the bills, sometimes for no reason and without justification. As we know, there are cost increases everywhere, whether due to the war in Ukraine, speculation or the disorganization of the markets. Inflation is inevitable, but the rate of inflation is negotiable. I want to say that our job, as distributors, is to protect our consumers! Leclerc has 18 million customers. I want people who come to shop with us and find out about price increases to know that we’ve done everything we can to cushion them.

Is it a return to the harsh negotiation with suppliers, the one that has been criticized so many times for supermarkets?

The public trusts that we will keep prices rising as little as possible. And then yes, we negotiate. Some manufacturers have good arguments, but in general there is a lot of opacity in their demands. We have the impression that everyone is trying to pass the increases very quickly because they know that afterwards, the consumers will scream. We hang on and sometimes have a shortage of supplies. This is the return of the negotiators. And in addition, manufacturers would also do well to reactivate their purchasing department and get out of the lethargy of Covid.

How do we make sure we don’t go too far in the negotiation, especially with farmers who need a certain price level to live on?

First of all, it must be recognized that for breeders in particular, production conditions are difficult. We might as well have hoped that the grain farmers would give them some discounts anyway, that there would be a bit of solidarity between them. So, it should be remembered that the FNSEA wanted a law, EGAlim 2, that protects the costs of agricultural production. Let the State assume its responsibilities! We do not discuss the increase in agricultural prices and, therefore, if there are demands to be made, let them be made. If the price of milk has to go up, let it go up. But we don’t buy from the farm, our suppliers are manufacturers, so I’m not sure we’re the right person to contact for these requests…

If these requests are addressed to you, it is also because you have chosen to embody the struggle for purchasing power…

Yes, I personalize our brand engagements a lot. And I can tell you that all this summer at the Tour de France, whether we sponsor it or in my Brittany, when I go racing the GR 34, people I meet give me thumbs up and say “Don’t give up! ” You know, when I audition myself in the National Assembly, I have deputies or senators in front of me who tell me that I have to release all the raises of the industrialists today. Correct. But when these same people return to their town, they have to confront the managers of the canteens who ask for subsidies so that the price of the menus does not increase. And there they rediscover the truth of costs and prices for families. So yes, that we revalue for French farmers and SMEs. But when it comes to big companies, big manufacturers, it doesn’t seem very moral to me to ask for price increases and then demand a food check paid for with public funds. I would like everyone to get out of the double talk. Anyway, mine is clear.

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