Does Carrefour’s Pepsi Boycott Mean Lower Food Prices Are on the Way?

It’s impossible not to notice how much more expensive food has gotten over the past several years—while the overall consumer price index went up 16.5% between 2018 and 2022, food prices went up 20.2%, according to the USDA. Most of it happened during 2022, when inflation, extreme weather, a major war, and other unpredictable events meant supply chains were supremely messed up; the big logistics knot drove grocery prices up a jaw dropping 11.4%, the biggest annual increase since the ’80s.

Over the past year, believe it or not, price hikes have slowed down—as of November, consumer prices had inflated just 3.1% since last year—which could serve as a predictor for what groceries will cost in 2024. Forecasting from the USDA shows that prices for so-called “food-at-home,” more colloquially called “groceries,” is set to rise 4.6% this year. (So long as there are no unpredictable events, like last year’s avian flu, which made egg prices skyrocket. Luckily, stuff like unprecedented droughts and superstorms barely happen these days.) While consumers undoubtedly want to see prices return to where they were in 2019, slow price increases might actually be the ideal; the Federal Reserve’s preferred inflation rate is 2% per year. If prices were to plummet, the economy could basically grind to a halt, as Jeanna Smialek pointed out on The Daily.

All that said, it doesn’t mean mega-snack conglomerates will definitely slow their roll on price increases. In an earnings call in late 2023, PepsiCo Chairman and CEO Ramon Laguarta said he expected the company to have a “bit more elevated price mix in the equation that in the previous years,” which, if you don’t speak corporate, roughly translates into our products are going to continue to be more expensive. As Laguarta made clear in yet another earnings call in July of 2023, Pepsi isn’t worried that jacking up the price of food will drive customers away. “We’ve been able to raise prices, and consumers stay within our brands,” he said. Brands like PepsiCo can raise their prices because customers have a strong loyalty to their products, and they know it.

Several major food suppliers have had incredible profits in the last year. In its third quarter report in fall of 2023, Coca Cola boasted that its gross profit grew 12% year over year to nearly $7.3 billion. As of late September 2023, Kraft-Heinz reported a gross profit of more than $6.6 billion for the year, an increase of nearly 15% from the year before. Pepsi, too, has seen eye-popping profits. The company’s net income increased 16.9% in 2022 to nearly $9 billion.

“Over the last year, inflation has come down at a record pace. Wages are higher, but profits continue to rise,” says Zelnick, of the corporate watchdog group. “These corporations are in really good positions to take advantage of this environment where a lot of consumers alike have gotten used to the higher prices and so [the companies] have no incentive to lower their prices.”

So despite pressure in Europe for lower snack prices, it’s likely that your favorite snacks will get more expensive. I also wouldn’t count on your preferred American grocery chain going to bat for you to secure lower prices; while such grocery store boycotts have happened in Europe in the past, it’s a rarity here. Instead, your only option may be to dissolve any sense of brand loyalty you may have in favor of more wallet-friendly options. Perhaps it’s time to consider some of those off-brand chips you’ve been eyeing, because, according to Zelnick, we shouldn’t count on name brand products getting cheaper without a fight. “Corporations are going to continue to price gouge as long as they’re able to.”