Inflation: Will the price of the baguette increase in supermarkets?

The baguette soon hit by inflation? The symbol of French gastronomy is not immune, according to the words of Dominique Anract. The president of the National Confederation of French Bakery and Pastry (CNBPF) explained last month to Release that its price could soon be generalized to 1 euro in most French bakeries, against 89 cents currently. In question ? Production costs which increase, pushing bakers to pass this increase on to consumers, by increasing the purchase price of the baguette by an additional 5 to 10 cents.

The increase in production costs is partly due to the surge in the price of raw materials. Thus, the price of wheat jumped 30% in 2021, causing the flour label to take off. Indirectly, the increase in the cost of energy is also responsible, gas and electricity being necessary for the operation of the bakers’ ovens. The prices of packaging bags as well as the salaries of employees have also increased. If these arguments justify an increase in the price of baguette in bakeries, supermarkets have entered into resistance.

“I will be surprised that a large retailer increases the price of its baguette”

In supermarkets, the price of a classic baguette is significantly lower than that displayed in bakeries. At Carrefour, for example, it is 45 cents, against 39 cents among competitors Intermarché and Super U. As a result, hypermarkets achieve very little, if at all, a margin on sales of baguettes. In 2015, LCI argued that on the basis of a baguette sold for 50 cents, a hypermarket sign recorded a loss of 1 cent.

Obviously, the quality is not what you can find in a traditional bakery. But the business strategy is different. If the white baguette is not profitable in supermarkets, it nevertheless represents a valuable product of appeal for consumers. This policy should not change anytime soon according to Thierry Desouches, head of external relations at Système U: “It is a psychological product, for which people have benchmarks. If there are increases in the price of raw materials, we will choose to absorb. We must not lose our grip on this type of product, otherwise the consumer will look elsewhere. ” Thierry Desouches does not hesitate to broaden his reasoning to all of his competitors and would be “very surprised that a large distribution brand increases the price of its baguette”.

Among other market players, the story is indeed the same. Contacted by Capital, the Auchan sign affirms “that an increase in the price of the baguette is not on the agenda. The cost of flour is only 1% of the total production cost. The increase in the price of wheat therefore has no real impact on the final amount. ”

The Carrefour group has also chosen not to modify its prices: “The price of the baguette will remain unchanged over the coming months, even if the prices of our suppliers as well as production costs in general increase” confirmed with Capital, the company headed by Alexandre Bompard.

This unanimity complicates the task of bakeries located in the same perimeter as large-scale retailers. According to The echoes, some of them have been forced to freeze their prices for several years due to fierce competition. For these businesses, it is impossible to amortize an increase in production costs, at the risk of scaring customers away.