EU - the Forgotten Market

According to the CEO of the largest French supermarket chain, Carrefour, high prices have forced consumers to make "massive cuts" to spending on essential goods, and urged the government to delay a law putting a cap on promotions retailers can offer.

Speaking on Tuesday, Carrefour Chairman and Chief Executive Alexandre Bompard warned "we are seeing a non-spending tsunami in France," adding that "when essential staples are no longer accessible, when people go without essential goods, one must act."

The comments, which were cited by Reuters, which sent Carrefour shares down more than 4%, were the latest salvo in a blame game between the French government and retailers on who is responsible for the increase in the cost of living.

As Europe's inflation shock eases - however briefly - France is seeing less of a drop in prices than many countries due to a surge in food inflation since March after annual price negotiations between retailers and producers.

The French government is eager to get food inflation - more than twice the overall French inflation rate of 5.1% in July - on a downward path, fearing that such high levels will undermine fragile consumer confidence. And while household confidence remained stable for the third month in a row in August - one can only imagine the "seasonal adjustment" gymnastics to gaslight the population that everyone is happy - it was well below its long-term average, according to a monthly survey from the INSEE statistics agency.

Bompard, who was among French retail executives due to meet Finance Minister Bruno Le Maire on Wednesday to discuss how to lower prices, said he would ask for a one-year moratorium on the application of the law, which is currently scheduled to take effect next March. The so-called Descrozaille law, which was passed in March this year, extends a limit of 34% on promotions that retailers can apply to food items to beauty, hygiene and care products.

Bompard, who has slashed prices to win back shoppers in the face of stiff competition, said that while today Carrefour is free to sell washing powder at a 60% discount, it would no longer be able to do so when the law takes effect.

The law's stated aim was to protect small producers in price negotiations with retailers; however, giant retailers like Carrefour say it limits their bargaining power with large suppliers, and Bompard on Tuesday said the new rules benefit only global multinationals like Procter & Gamble, Henkel and Unilever. Almost as if this was yet another government ploy to benefit corporations at the expense of ordinary people.

"They see their margins increase while the French are in a situation of deprivation," Bompard told Franceinfo. P&G, Unilever and Henkel did not immediately respond to requests for comment.

Le Maire in March secured pledges from 75 food producers to cut prices on hundreds of products, but a junior minister last month said that only about 40 had made good on their promise. On Tuesday, Le Maire vowed to step up pressure on retailers and producers to accelerate price cuts.

"We are on the right track," he said. "Prices are now falling because we have intervened, because we put pressure on retailers and producers and because we will continue to do so."

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mullokintyre said:

I thought it about time we had a thread devoted to The EU, despite its myriad of problems, is still a major player in world economics.

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LONDON, Aug 30 (Reuters) - European new car registrations jumped 15.2% in July, the 12th consecutive month of growth as the auto industry recovers from pandemic-related supply chain issues, data from the European Automobile Manufacturers Association (ACEA) showed on Wednesday.

Electric vehicle sales jumped 60.6%, continuing a rise buoyed by subsidies in a number of European Union countries. Full EVs accounted for 13.6% of all new car sales, up from under 10% in July 2022.


Plug-in hybrids, which have both a combustion engine and a large battery, accounted for 7.9% of sales, while one in four vehicles sold in the EU was a full hybrid.

Between them, petrol and diesel engine models made up just under 50% of sales. Diesel vehicles, which alone comprised more than 50% of new car sales as recently as 2015, accounted for just over 14% of sales in July.

Europe's top car seller Volkswagen (VOWG_p.DE) posted a 17.9% increase in sales in July, the ACEA said, while BMW (BMWG.DE) and Renault (RENA.PA) saw sales rise 22.5% and 16.9% respectively.


But Stellantis (STLAM.MI), which has struggled with logistics problems and car deliveries in Europe, posted a 6.1% drop in sales in July.

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Dona Ferentes said:

and here's an interesting development with the 3 Seas Initiative ... now we have Brics, and Quads, and Aukus, and G20 and Arab League, Belt and Road, etc
.

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mullokintyre said:

Global use of the Euro as a currency has been declining on world markets.
From Zero Hedge
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Mick

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mullokintyre said:

The left of centre ruling coalition in Germany have been stunned by massive defeats in tow states.
And it has come from swinging voters to both far left (CFD) and far right parties (AFD).
It will be the first time since WW2 that a far right party has ruled a German state.
And we know how well that ended.
Some interesting times ahead for Germany.
Mick
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mullokintyre said:

The left of centre ruling coalition in Germany have been stunned by massive defeats in tow states.
And it has come from swinging voters to both far left (CFD) and far right parties (AFD).
It will be the first time since WW2 that a far right party has ruled a German state.
And we know how well that ended.
Some interesting times ahead for Germany.
Mick
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mullokintyre said:

To no one's surprise, the CB cut interest rates by 25 bps.
They also cut their forecasts for GDP.
Mick



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EDITED to add:
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So they inflation expectations icreasing into 2024 and 2025 , but GDP growth slowing to less than inflation.

Mick

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qldfrog said:

Getting poorer

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