French retail giant Carrefour has removed Pepsi products from its shelves over what it deems are unacceptable price increases.
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PEP shares trade at $168.94 after a rejection at $175. A breakdown through the uptrend support could see the stock retest the lows around $156.
Global supermarket chain Carrefour has announced it will stop selling PepsiCo products in its stores in France, Belgium, Spain, and Italy due to price increases for popular items such as potato chips, oats, iced tea, and Pepsi soda.
On Thursday, the French grocery chain pulled PepsiCo products from its shelves in France and added minor signs saying, “We no longer sell this brand due to unacceptable price increases”.
The move comes after a new French law was released to fight the rising cost of living, with supermarkets facing millions in fines if they don’t reach a deal with suppliers.
The ban affects other European countries, but the brand has 12,225 stores in more than 30 countries. It didn’t say when it would take effect in those countries.
PepsiCo said in a statement that it has “been in discussion with Carrefour for many months and we will continue to engage in good faith in order to try to ensure that our products are available.”
The company has raised double-digit percentages for seven straight quarters, most recently hiking by 11% in July-to-September. Profits have increased at the firm, but sales have been lower as consumers trade to cheaper brands. PepsiCo has also admitted to shrinking package sizes, known as “shrink-flation”.
In the US, several grocery chains, including Walmart, have expressed concern that companies are pushing up prices even as overall inflation has come down.
The recent resistance could be a selling opportunity for traders in Pepsi shares. The company’s aggressive price hikes have helped profits with slowing sales, but now that could diminish.
