The price war moves lines, mass dismissals

French consumers' purchasing power stagnant or even declining, leave no alternative: the price war is declared over and intensifies, leading to casualties until the hushed offices s branches.

Treasurers and volatile, consumers hunt for bargains, not hesitating to visit several stores or surfing the net to find the best prices.

"Consumers are facing a first tightening of tax and price increases, wage freezes, not to mention the consequences of rising unemployment which lead them to save by cutting their defi ; think, "explains Alexander Mirlicourtois, an economist at the institute Xerfi. 

"In this context of zero-sum game where everything that is earned by some is lost by the other, the short-term strategies of both producers and distributors are very constraints and go through domination by prices and costs, "he adds.

"This is illustrated by the arrival of Free Mobile."

Frank Esser, head of the mobile operator SFR, which contributes 40% to operating income of its parent company Vivendi, has been sacked for not much anticipated the arrival of Free (Iliad).

This is the latest example. In large groups with the French market still represents a significant portion of revenues and profits, it is not good to be in charge of France.

At Carrefour, the replacement in May of the Executive Director for France did not allow the CEO of leading food retailer in France to save his head and Lars Olofsson will leave in June.

Earlier this year, PSA Peugeot-Citroen, whose market share of passenger cars in France fell in 2011, appointed his finance director Frederic Saint-Geours at the head of the management of brands.

POWER AND WANTING TO BUY

"Households have a strong feeling of restriction. They are bombarded with commercial offerings and have the desire to consume, but they feel very strongly that their purchasing power is not up to their 'will to purchase ", said Franck Lehuédé, Department of Consumer Research Centre for the Study and Observation of Living Conditions (Credoc)

……. .. "They make choices, and the first sector they highlight is the recreation and communication. There is a generation effect: even in times of crisis these areas remain safe havens, "he continues

……. .. "Health is another area that goes well the crisis. In an aging society, crisis or not, health spending increases. "

We must also consider spending constraints , some such as housing and energy soared, pushing consumers to restrict all others, especially the equipment housing, automotive, clothing and even food

. In the car, which has largely lost its role as a social marker, the price war is raging in particular small cars entered e range. This segment, which has benefited most from the scrappage scheme, is struggling since the demise of a measure which, in turn, has used drivers at prices even lower.

Household spending in textile-leather were down 5.6% yoy at end-January, according to INSEE.

In food, arbitrations are equally radical. The sector experienced in 2008 and 2009 two consecutive years of decline, the most since World War II. In 2011, these expenditures have stagnated in volume.

"If households do not necessarily consume less in volume, they consume less," notes Franck Lehuédé.

Carrefour, which France represents 43% of turnover and 39.5% of operating income, failed to divest itself of an image of higher price s that some competitors, and sees the market share of its hypermarkets erode steadily.

ABOVE THE INDEPENDENT

Food service, at the confluence of entertainment and food, is symptomatic breaks imposed by the price dynamics with purchasing power at half-mast. The concentration of the industry structured around clusters, chains and brands, will continue.

Independent restaurants with fewer than three employees, representing 60% of institutions-have seen their market share in the turnover of the sector from 30% in 1994 to less than 20% in 2007 and 2020 groups will distribute 45% of meals provided against 38% in 2007, according to research firm Eurogroup presented March 20 by the National Union of ho ; i-bays, restaurants, cafes and caterers (Synhorcat).

"When consumption is down, there is no other choice but to take customers to the competition through a strategy of capturing market share with a continuous expansion of networks distribution, "Alexander Mirlicourtois analysis. "The price war is no thank you and independents will be the main victims in 2012."

If the market is already locked by major retailers, the development is done either by transfer of a sign shop to another, like the 46 Carrefour stores recently spent ; s the flag-U system, whether by merger to the image network of garden centers and Pollen Villaverde who have come together to give birth to a group uniting 185 stores, now the fifth player in the sector.

The same logic was the end of 2010 the approximation of jewelers Histoire d'Or and Marc Orian, who formed a network of over 500 stores under six banners, high of 370 million euros of turnover. 

When the market is not locked or not, the chains held in place their denser mesh and open new stores. This allows them to have an additional strike force with their suppliers to drive prices down and capture the business of the independents.

But "low prices all year need to go deeper into offshoring, to pressurize perpetual sub-contractors, as soon as possible to substitute skilled jobs by unskilled jobs, "notes Alexander Mirlicourtois.

"If, initially, the price decline is pleasing to consumers, deflation is a deadly poison, it's a vicious cycle that becomes self-sustaining and that destroys the value of all goods than that of labor. "

In Italy, wine is combined with fashion to export

The largest wine producers in Italy are joining forces with the world of fashion to boost their sales in the U.S. and emerging markets, hoping to offset lower consumption in the pe Peninsula.

Italian wine sales were flat last year to 12 billion euros, and as Italy plunges into recession, dragged down by its austerity measures ;, the future of its wine industry depends increasingly on exports.

Italy is already the world's largest exporter of wine by volume and second only to France in turnover. Italian wine exports jumped 13% last year to 4.4 billion euros and represent, with 2.4 billion liters, about 55% of its total sales.

But as competition intensifies in France and relatively new entrants from Australia, South America and South Africa, the main Italian producers have chosen to partner with claws fashion and design to better stand out.

Members of the Federation of luxury Altagamma thus agreed to accompany their parades and events of their Italian wines, saying pleased to promote diversity and quality of products manufactured ; s in Italy.

"It is clear that fashion attracts more attention, it is better known around the world. Everywhere we go, we take our Italian wines and make known, "said Santo Versace, brother of designer Donatella Versace and president of Altagamma, on the occasion of inauguration of Vinitaly, a renowned wine fair which is held in northern Italy from March 25 to 28

. MARKETS WHO

THIRST While export volumes exceed those of its domestic consumption since 2010, the Italian wine is turning increasingly to its carriers in foreign markets like USA, Russia and China, following in the footsteps of other manufacturing sectors of the peninsula, from fashion to metal production ..

……. "The future belongs to export," explains Lucio Mastroberardino, president of the federation Unione Italiana Vini Italian wine (IVU). 

"The United States, North America will remain a long time the largest market for Italian wine. Exports to China, India showing strong percentage growth but volumes are still trè s low. People out there just find the wine, "he notes.

Italy is the first player in the American wine market, with a market share of around 30%. About a third of Italian wine exports are destined for the United States, world's largest market. According to the producer, Italian wine sales have increased 16% in 2011, a sign that the market has recovered significantly since the 2008-2009 crisis.

"Throughout the crisis, the volume (sales) wine continued to increase, but the price range has shifted. Some of the more upscale wines have suffered, some wines have benefited more accessible, "notes Thomas Matthews, editor of Wine Spectator magazine …….

.. This year, the increase in exports of Italian wine in the world should be similar to or better than last year, pre ; said Lamberto Vallarino Gancia, president of the federation wine Federvini

. "What distinguishes us is that What the big wines like Barolo and Brunello, which are the main drivers of our exports, we have a wide variety of quality wines in all price segments, "said he.

The reforms must be pursued in the euro area, said Draghi

The euro area is beginning to stabilize but his future will depend on the integrity of structural reforms undertaken by Member States, said Tuesday the president of the European Central Bank, Mario Draghi.

The leader, in office since last November, said the inflation risk did not materialize currently within the euro area since the output gap remained, while expressing "determined" to continue the work of his predecessor Jean-Claude Trichet in terms of price stability.

"We are constantly vigilant about inflation risk but this risk does not materialize at the moment," he said during a speech in Paris on competitiveness ;. 

The ECB continues to see signs of stabilization in the euro area which would benefit the member countries to pursue economic reforms, he said.

"We continue to see signs of stabilization although they are shy," said the central banker, before asserting that rates low in the short term together with measures to the sector would support financial growth.

The ECB has held since December two large lending operations to three years (LTRO) for banks for a total turn around of a thousand billion.

Mario Draghi said that banks should do the same to strengthen their balance sheets by retaining earnings and by reducing dividends and bonuses. 

"The strength of bank balance sheets will be a key factor in facilitating their lending activity, their primary mission," he said.

The President of the ECB has however expressed concern about the differences in competitiveness, increasing according to him, among the member countries of the euro area.

According to the ECB, labor costs rose two and a half times faster in countries with balance of payments deficit in countries that accumulate surpluses.

"Member countries must reduce their competitiveness and enhance their own prosperity and stability of the monetary union," he said. 

"If we do not reform all together, and this has been said many times early in the life of the euro, it will be difficult to maintain the integrity of the area ".

China interested in electric models by Renault

The Renault range of vehicles that manufacture and market in China will incorporate at least one electric model at the request of the Chinese, said Tuesday the deputy CEO of group.

Renault hopes to produce locally from 2014-2015, joining Nissan in the Chinese market through joint venture that holds its Japanese partner with China's Dongfeng. He hopes to get the green light from authorities by the end of the year to start building its first factory in China.

"Our Chinese partners are very interested in zero-emission vehicles, including electric vehicles," said Carlos Tavares to the press room Geneva Motor Show.

"They asked us to integrate our product plan vehicles of this technology and of course, knowing this is one of our strengths, we agreed to do so willingly, for benefit of the JV, "he added.

"It is tasty as the bet of the electric vehicle is the element that we will return to China, but it is a fact, they asked us."

Renault unveiled in Geneva at the forefront of its electric range, the city Zoe, which will be produced soon Flins (Yvelines). It adds to the Kangoo nonthermal, the Fluence sedan and mini-urban vehicle Twizzy

. Despite a slower start than expected this type of vehicle, the group believes they still account for 10% of the automotive market in 2020

.

Mitsubishi will build more in Western Europe

Mitsubishi Motors announced Monday it would cease later this year to build cars in its sole plant in Western Europe, the Netherlands, a move that was expected after the fall of sales on the continent.

Cars Nederland site, or NedCar, built the Colt and Outlander 4×4 but less than 5% of the total production of Mitsubishi, or 1.1 million vehicles for the year ended 31 March last.

NedCar production, jobs that 1,500 persons, fell to 50,000 vehicles per year, while it has a maximum capacity of 200,000.

Sales of Mitsubishi Motors in Europe accounted for 340,000 vehicles in fiscal 2007/2008 but had fallen to 218,000 in 2010/2011. 

Mitsubishi Motors is building a new factory in Thailand and plans to increase production in Brazil and China.

NedCar, based in Born, was born in 1991 as a joint venture between Mitsubishi Motors, Volvo and the Dutch state. Mitsubishi became the sole owner in 2001 having bought out his partners.

Values ​​to follow Friday at the Paris Bourse, where the CAC 40 index advances 0.65% to 3084.49 points in very small volumes, however, less than 800 million have changed hands on the index as part of Euronext platforms.

* EADS (4.65%) signed the largest increase in the CAC 40, after a jump of more than 5% related to his statement of annual goals and quarterly earnings well above expectations.

In addition, according to industry sources, the Qatar Airways and Emirates airlines as well as the lessor of aircraft ALAFCO could spend significant aircraft orders at the Dubai Air Show, which begins Sunday.

* BNP PARIBAS advance of 3.38% to 31.54 euros.

* Veolia Environnement (-1.07%) continues to suffer from its new warning issued yesterday, many brokers have lowered their price targets and estimates of value.

* SOITEC jumped 14.51% after announcing that its subsidiary Soitec Solar Development had received regulatory approval from the Commission to regulate utilities in the State of California for its five power purchase agreements concluded with San Diego Gas and Electric.

TF1 * (-13.49%) shows the largest decrease in the SBF 120, the group has lowered its forecast revenue for 2011 after the graduation of net advertising revenue of its flagship channel in the third quarter.

S & P lowers rating of ten Spanish banks

Standard & Poor's Tuesday lowered a notch credit rating of ten Spanish banks, including the two main countries, highlighting the darkening economic prospects and a housing market still depressed.

The prospect of all banks rated by the agency is now negative, which means that further declines are possible notes.

Among the downgraded banks Santander and BBVA are the main institutions of the country.

For Banco Santander, the rating drops to AA-, against AA with a negative outlook. Similarly, for Banco Bilbao Vizcaya Argentaria, the note back from AA to AA-.The new perspective is also negative.

S & P also revised the rating outlook of four banks, reducing it from stable to negative, and placed the bank under review with negative implications.

Stability of producer prices in August

The producer prices of French industry in the domestic market increased by 0.5% in July before stabilizing in August, show figures released Friday by INSEE.

These figures are consistent with the consensus estimate of economists polled by Reuters.

In one year, the index of producer prices on the French market shows an increase of 6.3%.

Prices of petroleum products fell 2.2% in August after a 3.5% increase in July, Insee said.

The food prices have remained stable in August as in July.

"In August, prices of electrical, electronic and software grew by 0.6%, including the prices of components and circuit boards (1.0%), driven by commodity prices," says INSEE .

Prices of industrial products for foreign markets, unchanged in July, fell 0.3% in August.

For all markets, prices of industry production was down 0.1% in August after 0.3% the previous month.

France could reactivate the plan to help banks in 2008

The French authorities said Sunday that the system created in 2008 to help banks following the collapse of Lehman Brothers was always available on event "extraordinary".

However, they insisted that French banks, whose market value has shrunk in a few weeks, were strong and they did not need injections of public capital demanded by some stakeholders in the financial markets.

"The only thing that exists is the mechanism 2008 of a public company may purchase securities in the capital of banks if they express a need.So if there was an extraordinary event, this mechanism is in place, "said the Governor of the Banque de France, Christian Noyer, in an interview with Journal du Dimanche.

"There is no plan.And besides we do not need, "he added, saying once again its confidence in the strength of French banks.

The Sunday newspaper also reported that a proposal by the French authorities to banks, September 11, to put 10 to 15 billion euros at their disposal, along the lines of operations in 2008.

Banking sources said this week told Reuters that exploratory talks on a possible state support to the banking sector were underway.

READY FOR 2013 IN BASEL III

According to the Journal du Dimanche, the CEO of Societe Generale, an institution whose share price tumbling for weeks, has accepted the proposal of the authorities, provided that all banks participate.But "BNP Paribas declined to be supportive, burying the project immediately," wrote the weekly.

"Many intervention schemes were under consideration, simple loan to the issuance of preferred shares with warrants," he says.

Contacted by Reuters, BNP Paribas, Societe Generale and Credit Agricole had no comment.

As for the Ministry of Finance, "between the more formal denial" of the possibility of an imminent public recapitalization plan mentioned by the Journal du Dimanche.

Christian Noyer also stressed in the same interview that he has asked banks to speed up the process of strengthening their capital of schedule III of Basel, the international agreement designed to make banks more resilient. "They will be ready by 2013," he said.

To address the financial crisis following the collapse of U.S. bank Lehman Brothers, the French government established in the fall of 2008 a plan to help the banking sector by mobilizing a budget of 360 billion euros, including 40 billion to build equity and 320 billion to help banks refinance themselves via the Company's financing of the French economy (SFEF).

Do you live better or worse than before?

According to a survey, three out of four Fançais observe a decline in their standard of living. And you? The basket of essential goods for households with small budgets

Three in four French people think life worse than before, a decision that had never reached such a level for twenty years, according to a survey by TNS Sofres for the association of mayors of major cities in France.

To the question "Did you feel that in recent years people like you live better or worse than before," 75% of respondents answered "less". This feeling is a "historic high in the evolution of the personal situation of the French" in the TNS Sofres survey, conducted since 1981, said the institute.

It manifests itself particularly in the 25-49 age group (81%) and among the employees (87%) and workers (82%).Only 14% say their side "better life", while 10% see no change (1% undecided).

With an unemployment rate of 9.6% according to INSEE, and generally 3.3 million people, who are not working but want to work in France, the fear of becoming unemployed grows in the opinion, according this investigation. Two out of three French (66%) fear of "risks of unemployment", for themselves or someone in their household. A result in increase of 4 points from last year and 16 points since 1988, said the Sofres.

And you, your standard of living has deteriorated there? How do you explain it? do you fear unemployment? Give us your opinion in the comments.