Yolanda Díaz, holding the role of Second Vice-President and Minister of Labor, proposed last September a bundle of essentials at accessible prices, drawing a comparison to Sarkozy-era France. The move sparked pushback—from large and small retailers alike, criticism from the socialist faction within the coalition, and even a notable note from the National Markets and Competition Commission warning that price setting is not permitted by law. Six months on, France again surfaces in the news for a deal with distribution chains to offer quarterly discounts on specific items. What distinguishes these approaches between the two nations?
VAT reduction and control
Unlike France, Spain moved to cut VAT on basic goods, lowering it from 10% to 5%, and reducing pasta and olive oil from 4% to 0% last December. A 200-euro allowance for vulnerable families earning under 27,000 euros annually accompanied the measure. Additional steps were considered to soften the burden, such as a cap on gas prices within the electricity market or diverting revenue from extraordinary income produced by nuclear and hydroelectric facilities to offset some costs.
Yet United States statistics cited by the media show these measures did not stop a 15% rise in food prices. The National Institute of Statistics (INE) notes that while core items may see temporary relief, overall baskets still climbed. A four-person weekly shopping simulation by El Periódico of the Prensa Ibérica group suggested that the price of a typical basket rose for households. Financial Users Association (Asufin) calculations put the average basket across five leading retailers (Mercadona, El Corte Inglés, Carrefour, Alcampo, and Dia) at 39 euros, up 1.31%. Government figures from the Minister of Agriculture, Fisheries and Food, Luis Planas, argued costs have “reached the ceiling,” and that any price cuts would soon fall short of expectations. Asufin has contributed independent analysis on these dynamics.
French supermarkets create anti-inflation shopping carts with hundreds of products at low prices
“voluntary” agreement
France reportedly pursued a voluntary agreement to reduce prices across several companies. Reports highlighted one major retailer, Leclerc, which, according to critics, did not align with others in the sector. The Spanish Minister of Agriculture, Luis Planas, indicated national supermarkets should consider adopting a similar strategy, though many major players appeared reluctant to endorse it. The AECOC, representing the distribution sector, stated that the French proposal diverged from anything currently proposed in Spain. Observers noted that the French announcement, which included a photo featuring the finance minister, Bruno Le Maire, might have been more about optics than substance. In a broader context, Nadia Kalvino, the Vice President and Minister of Economy, suggested that multinational groups with presences in both countries—Carrefour being a prime example—could extend comparable offers to Spain. Planas, speaking at a post-Council of Ministers briefing, called on Spanish companies to pursue a similar approach.
less concentration
The distribution landscape in the two countries reveals structural differences. In France, three supermarket groups—Carrefour, Leclerc, and Les Mousquetaires—dominate about 58% of the market. Spain, by contrast, shows a broader field with seven major players shaping roughly 56% of the market: Mercadona, Carrefour, Lidl, Dia, Eroski, Consum, and Alcampo. This greater fragmentation in Spain fosters intense competition and can pressure retailers to sharpen prices to retain customers. Consumers often benefit from more options and sharper pricing strategies. Eurostat data from mid-2021 showed Spain’s average food price was two points below the EU average, while France ran higher than the bloc’s average, though each country’s market dynamics differed in ways that affected maneuvering room during price peaks.
margins issue
In Spain, industry voices argue that price increases stem from higher production costs rather than expanding operating margins. The retail and consumer sector, during a food forum in the Congress of Deputies, pointed to a gap between rising costs and margins, noting the wholesale-distribution sector swelled by about 31.7% in gross value added. An EY adviser, José Antonio Latre Ballarín, echoed this view. A 2022 OCU report supported the idea that retailers were elevating prices in step with inflation. Chain leaders like Mercadona, Dia, Consum, and Eroski have benefited from thinner margins, while groups like Ahorramás and Alcampo faced different pressures closer to the farm gate due to rising input costs. Observers wonder how Spanish supermarkets will fare when they close their annual accounts, with Mercadona’s figures anticipated in the near term. In France, Carrefour posted substantial gains in 2022, underscoring how price strategies and margins can diverge across major markets.