As the results of the UK’s big supermarket players are released, it becomes clear that there is something rotten in Albion. The likes of Tesco, Morrisons, Sainsbury’s, etc. have each in turn announced steep decreases in their financial results, or even plummeting losses. The economic model seems, if not outdated, at least weakened. Yet this is not only on the other side of the Channel; this is no “so British” cultural exception. The profitability of the supermarket chains is no longer what it once was. The long crisis period we are going through is evidently dragging down on the trend. Consumption in terms of volume is at best flat, and at worst on the wane - and in terms of value it is tumbling. The spectre of deflation is haunting European and American central banks. The famous growth drivers — the BRICS economies (Brazil, Russia, India, China and South Africa) are out of gas. In short, there is nothing doing for the temples of consumption. Yet the bad news lies elsewhere; in the effects of these poor financial and economic performances on price negotiations between supermarkets and suppliers. True, the shareholders are requesting store closures, modernisation of the networks and development of the range of in-store and web services, etc. Yet what they are asking for above all is savings in purchasing. While the big suppliers are holding their ground and getting themselves talked about in the media during the annual negotiations, suppliers from less strong industries are complying in silence, because they have no other choice. The move toward purchasing centralisation, in France for example, is slashing the number of purchasers. Yet not to worry, the suppliers will exert the same pressure on their own suppliers, and so on. At the end of the chain, no cause for concern, the agricultural producers will ask their trees to yield two harvests a year, their cows to produce bottled milk directly and their hens to lay twice as many eggs, but pre-dated, and if possible scrambled in the morning. The only winner in all this is perhaps agronomic research, at least while there are still any farmers left.
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