Inflation will not improve after Christmas. Picard, which reaches a quarter of its turnover between Nov. 15 and Dec. 31, doesn’t expect sales to drop during this crucial period despite the sluggish economy. The opposite. customers flocked to foie gras, the price of which, however, rose by 10%. Avian flu has certainly made this Christmas staple a hard-to-find item. With inventory cut in half from last year, Picard waited until the last minute to put it on the shelves. But the French’s appetite for holiday products should not be limited to foie gras.
“I have been working in retail trade for 27 years. And I’ve never seen customers sacrifice Christmas during a crisis” explains Cathy Collart, CEO of Picard. The distributor has not given up on innovation despite concerns about French consumption levels. He launched frozen oysters last year. This year, he’s running his cheese tray to freeze a few hours before serving. “It was the only ingredient we were missing from the Christmas meal“explains the executive director. Above all, he thinks Picard will have this year.”the cheapest offer“. This is the advantage of frozen food, which can buy and receive products before fresh competitors.
In Picard, prices have increased by 10% this year. This is less, the executive director assures, than the 15 percent growth recorded in the entire market of frozen foods, which was especially affected by the increase in the prices of energy carriers. Picard needs it to run its freezers and refrigerated trucks, which exceeds the consumption of a traditional distributor. “80% of the energy we use is not for comfort, it is necessary for our industrial processes. explains Cathy Collart. The energy crisis is now my number one concern“. But Picard’s room for maneuver is much more limited than its non-refrigerated specialist supermarket rivals.
So far, the distributor has played on three levers to mitigate the price hike. He initially revised some of his recipes, substituting salmon for trout, or foie gras for Christmas shrimp stuffed with mushrooms. He also played on his long-standing relationships with his suppliers. “We have to offer them increased shopping volumes in the coming years, as we will open about 100 stores, as well as other sales channels.“explains the executive director. First of all, the distributor reduced his margin. For example, it wanted to keep the price of its entry-level ready meals unchanged at €2.20.
Energy bill multiplied by three
The challenge will be hard to overcome in the coming year. Picard’s energy bill is set to triple after it’s renegotiated later this year. And suppliers are coming back to charge new markups of between 10% and 30%. “Next year we will crush our margins and reduce our investmentsanticipates Kathy Collart. But it seems to me that it is important to maintain our price position. when inflation comes down we will keep our customers. If Picard becomes less affordable, we risk killing our business because lost customers will be extremely difficult to win back.“. In 2023, Picard should remain profitable. It is also happy to have refinanced its debt (€1.7 billion) before the rate hike.
It remains to convince the shareholders of the distributor. Moez-Alexandre Zouari, also the owner of Stokomani and a franchisee of the Casino group, is well aware of the constraints that rising costs impose on the business’s economic balance. If he wants to buy back the entire capital of Picard in 2024, then today he only has 47%. And the Lion Capital investment fund, which is the majority shareholder of Picard, expects profitability above all.
Source: Le Figaro
I’m Liza Grey, an experienced news writer and author at the Buna Times. I specialize in writing about economic issues, with a focus on uncovering stories that have a positive impact on society. With over seven years of experience in the news industry, I am highly knowledgeable about current events and the ways in which they affect our daily lives.