Money: Purchasing power: How do supermarkets finance promotions?

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Pouvoir d'achat : comment les supermarchés financent les promotions ? © MONTICELLLLO/Adobe Stock Purchasing power: How do supermarkets finance promotions? A survey reveals the practices of the distribution groups to maximize their margins. Among them, the promotions funded ... by the supplier.

While the inflationary thrust has become the first concern of households and businesses, through its investigation complement program, Franceinfo investigated the way the large distribution brands invoice their suppliers each meter every meter square of their stores. The public media also takes the opportunity to reveal the backstage of this discreet sector, and in particular the methods used by distributors to obtain wholesale price reductions in order to offer promotions to their low price customers. Questioned by Franceinfo on September 1, a representative of an international agrifood brand who wishes to remain anonymous confirms that "to be present on the prospectuses of mass distribution, we pay". Distributed to millions of copies, these leaflets are, for a brand, the guarantee of reaching a large audience. Knowing this, the distribution brands negotiate the locations at the least expensive prices. The company of the manager interviewed thus spent 200,000 € the publication to appear in 500 prospectuses each year: a budget of 100 million euros annually, all brands combined.

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But marketing costs do not stop there ... The broadcast advertisements in store are also billed at gold prices. "In negotiations, sometimes they demand that you buy it," said the informant. According to him, his company would spend 5 to 10 million euros per year on radio spots.

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"The supplier finances 100% promotions" but the heaviest invoice for suppliers remains that of the promotions on the shelves, because whatever the Reduction amount, most of the time, it is not the hypermarket that pays, informs the source: "The brands make promotions throughout the year. They require their suppliers to offer them regular promotions On their brands, and they demand that they are the ones who finance them, which can suggest to the consumer that it is they who pay them. However, it is the supplier who finances 100% of promotions. "

practices that are not illegal, and are mentioned in commercial contracts. The manager interviewed by Franceinfo also indicates that it was by agreeing to finance the next promotions of his brand, that he was able to obtain an increase in prices this year.

to read also purchasing power: large distribution can still act on food prices, according to Marc Fesneau

Faced with inflation, how Aldi, Lidl and Leclerc are doing well .
© AFP / Daniel Leal-Olivas from July 11 to August 7, it was the company of German Hard Discount Lidl which won the More market share, according to Kantar Worldpanel. In July, the total turnover of large food areas fell, according to INSEE. The fault of inflation, which strikes the purchasing power of the French. The latter therefore turn to low -cost brands. In July 2022, the total turnover of large food areas fell 0.9 %, according to INSEE figures published on Wednesday August 31.

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