According to Lidl, “multinationals do not play the game to lower prices”

“There will be no green September”, assures the purchasing and marketing director of Lidl France, after the famous “red March” of this spring, when the prices of consumer products had soared by 16.4%. Despite the threats of the Minister of the Economy, Bruno Le Maire, to designate the multinationals which would not reflect the ebb in the prices of raw materials in their prices, none of them, or almost, played the game.

“Of the 45 major groups that sell major brands with us, only one has agreed to reduce its prices,” he said during a lunch organized on the occasion of the arrival of the Tour de France in which the discount chain participates with the Lidl-Trek team. Another would have offered to start discussions. Others like Coca-Cola contain occasional promotions.

Grow to better negotiate

Suddenly, the German discounter will have to continue to cut back on its margins to finance “hundreds of cuts”, says the French leader. To rebalance this balance of power with multinationals that post insolent profits, such as Procter & Gamble, Lidl could therefore decide to grow. The distributor had however decided to pause its real estate expansion.

But, according to information released by The world last week, the parent company would discuss with the English fund Attestor, a stakeholder in the takeover of the Casino group with the tandem Daniel Kretinsky and Marc Ladreit de Lacharrière, to acquire 600 Monoprix and Casino stores in France. A clearly exaggerated figure for the company which has 1,600 points of sale in the territory.

But the inflation of food products and the drop in consumer purchases are forcing the major retail players to review their strategy. Intermarché will take over a hundred Casino supermarkets, Carrefour has announced the takeover of Cora and Match in 2024, and Lidl, therefore, is interested in the locations of Monoprix and Casino. The objective is to strengthen its presence in the city center where German is still not very present. In Paris, for example, it has only 19 points of sale.

“People no longer want to spend four hours in a hypermarket to do their shopping, explains Michel Biero. The shopping cart at 1,000 euros once a month is over.” With its small supermarkets, offering 2,000 references mainly to its own brands, Lidl believes it has the right answer to the new concerns of the French.

A declining market share

However, Kantar’s latest score shows that the brand appreciated for its good value for money is also suffering. Between mid-May and mid-June, its market share in volume fell by 0.5 points. A first since the strategic turn taken by the brand in 2012 to move upmarket. Conversely, the E.Leclerc Centers gained 1.6 points to reach 23.8% of French retail. “Unheard of”, recognizes Michel Biero, who explains it by the hype of Michel Edouard Leclerc with his 1,000 Eco+ products. Lidl, which has already trimmed its margins so as not to be left behind, intends to remain the leading advertiser in France by insisting on its fight against the high cost of living.

“We will do what it takes to stay strong on prices,” said the leader, while denouncing the total lack of transparency of multinationals to justify their increases. On the other hand, products sold under its brand have seen their prices drop, such as cooking oil, which fell from 3.29 euros at the peak of the price hike to 2.30 euros.

The German giant, which achieves more than 100 billion euros in turnover in Europe, has also decided to integrate the manufacture of certain basic products such as bread, chocolate, ice cream, water or more recently pasta. It is also counting on e-commerce, which is now available in France, to boost its sales. A launch whose management says it is “rather very satisfied”. But Michel Biero already warns, “we will never return to before the crisis”.