Carrefour, one of the world's largest grocery chains, informed consumers on Thursday that it is withdrawing Lay's, Doritos, Lipton teas, and other PepsiCo brands in protest of price increases.
Multiple news agencies stated that stores in France, Italy, Belgium, and Spain might be affected. Carrefour, which operates over 12,000 stores worldwide, did not immediately respond to a request for comment from The Washington Post. The company announced the decision with a banner pinned to specific aisles in stores, saying it is "committed to lowering prices."
According to a spokeswoman for PepsiCo, the business has "been in discussion with Carrefour for many months and we will continue to engage in good faith to try to ensure that our products are available."
Carrefour's decision comes as Europeans continue to face high food prices. Food costs in France increased by more than 7% year on year in December. According to one estimate, price hikes peaked in March 2023, jumping nearly 16 percent.
In the United States, retailers have also fought with suppliers to reduce food prices. To apply pressure, some retailers will place brands in the "penalty box," according to Randall Sargent, a partner in Oliver Wyman's retail and consumer goods division.
This might result in less favorable shelf placement, less promotion, and higher prices, making the products "less appealing for consumers to buy that brand relative to another brand," she said.
However, more harsh approaches, such as removing all products, are not unusual in Europe, according to Sargent. Grocery stores in the region are smaller, resulting in fewer visible gaps on shelves, and European shoppers are already more likely to buy stores' own private brands, according to her.
"While consumers are still very loyal to certain national brands, it's a bit less disruptive when they're pulled from the shelf because they're already used to, and more willing in many categories, to shift to the private brand equivalent," he added.
According to a 2022 strategy plan, Carrefour expects to expand its private label. The corporation wants its private label to account for 40% of food sales by 2026, up from 33% in 2022.
According to the Wall Street Journal, PepsiCo's business in Europe amounts for around 14 percent of its global revenue, or about $9 billion. Given Carrefour's size and scope in the region, a loss of shelf presence "will definitely hurt the suppliers' business in Europe, if not globally," according to Sargent.