French hupermarkets launch price war

1st September 2004, Comments 0 comments

PARIS, Sept 1 (AFP) - French supermarkets launched a price war on Wednesday when the big name stores introduced price cuts on hundreds of leading products as part of an agreement with the government to boost domestic consumption.

PARIS, Sept 1 (AFP) - French supermarkets launched a price war on Wednesday when the big name stores introduced price cuts on hundreds of leading products as part of an agreement with the government to boost domestic consumption.  

Under a deal pushed through by Finance Minister Nicolas Sarkozy in June, retailers and producers undertook to lower the cost of some 2,500 food, health and beauty articles by two percent from September - with a further one-percent cut due in January.  

The main outlets such as Carrefour, Leclerc and Auchan launched major advertising campaigns in newspapers and radio stations on Monday as battle was joined to win over millions of potential customers.  

While some supermarkets have spread the two-percent cut over the entire range of named products, others have concentrated discounts on a smaller selection of articles which are now selling at up to 40 percent cheaper.  

The price-cuts agreemnt was forced through after consumers' and farmers' groups expressed growing anger at what they said were the unacceptable high profit margins enjoyed by super- and hypermarkets.  

With the centre-right government unable to bring down taxes because of tight budgetary constraints, it is also a key part of Sarkozy's strategy to enhance growth by pushing domestic demand.  

However the cuts have been denounced as insufficient by some consumer organisations which say they will quickly be compensated by hidden rises elsewhere. They also condemn what they see as an enormous publicity opportunity for the big out-of-town stores at the expense of local shops.

 

© AFP

 

Subject: French news

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