Inflation, shortages: craftsmen and traders in Corsica are suffering

In a context economically particularly tense while a new record inflation was reached in July Franceshe professionals out tourism and from Food face decline purchasing power and the exponential increase in the cost of many products.

Sometimes difficult to decipher, economic statistics are generally more meaningful through everyday reality.

ALSO READ: France: Inflation accelerated to 6.1% over a year in July

A reality that looks like an increasingly severe crisis, although some observers are no longer hesitant to raise the prospect of a recession in the euro zone now that the currency has started to fall following the massive injections of liquidity in 2020 and the creation of the new Asian Free Trade Area . A globalized context also marked by a strong resurgence in inflation, which reached a new record in France in July.

According to INSEE’s recently released preliminary estimate, the consumer price index has actually risen by 6.1% in one year, after rising by 5.8% in June. A level unprecedented since the beginning of this statistical series in January 1991. And a phenomenon “Not seen since the mid-1980s”could therefore be read The Echoes. What specifically determined that “Inflation is increasingly affecting services, the prices of which have risen by 3.9% in one year, industrial goods (+2.9%) and food. The latter are now registering a price increase of 6.7% over a year, which is higher than general inflation.

Despite an increase in growth of 0.5% in the spring and certain government measures (e.g. tariff protection for energy prices) that have made it possible to contain the increase in inflation in France compared to other European countries, the rise in prices is therefore still significant above the target of the European Central Bank (ECB). On the scale of France, the increase in the rebate at the pump from 18 cents to 30 cents planned for September, coupled with the expected fall in oil prices, could still help avoid an inflation peak of 7% next month, according to several economists. According to the most optimistic scenario, household consumption could increase by 0.5 points without returning to pre-crisis levels.

“Continuously Adjust”

Despite this, price inflation will continue in many areas in the near term, especially in the food area, where the increase could reach 8.5% in one year.

For example, bread has increased by 3.5 cents in one year, a pack of four slices of ham by 7.3 cents or even a potato fillet by 10 cents. Exponential increases, up to “Up to 15%, 30%, even 50% on certain products” emphasizes Frédéric Ruiz, representative of the island restaurateurs within the Umih (Union of Hotel Trades and Industries). In the middle of the tourist season, the Biguglia-based expert describes an unprecedented, delicate and particularly demanding one for traders.

ALSO READ: Tourism in Corsica: mixed atmosphere in the island’s hotels and restaurants

“In general, this context of declining purchasing power and scarcity forces professionals to constantly adapt to remain attractive and try to maintain visitor numbers in their facilities.he explains. The post-Covid recovery effect has calmed down and customers are reviewing their budgets, for example by giving up wine or even reducing the number of meals in restaurants. For a family of vacationers, the cost of transportation and accommodation is already high, the restaurant is not necessarily a priority and even becomes a privilege. If we want to keep an average ticket accessible, we have to achieve an increasingly complicated balance.

As the prices of flagship products skyrocket at suppliers, restaurateurs face daily dilemmas. “The kilo of duck breast, for example, went from 12 to 30 euros per kilo, continues Frédéric Ruiz. It is now difficult to offer a steak for 18 or even 25 euros. If we want to keep quality products, we can’t turn to less local channels, which will ultimately disappoint the customer. Rising fuel and transportation costs are affecting manufacturers, suppliers and professional groups. It’s a vicious circle, the effects of which reach down to the customer’s plate. We must therefore find solutions, sometimes changing the menus from day to day and working more at the blackboard, also relying on the understanding of customers who notice price fluctuations or the absence of certain products, such as. B. meat, the price has increased a lot. Even when it comes to everyday consumer goods such as oil, but also fruit and vegetables.

Bottlenecks with multiple causes, including the war in Ukraine and global warming. “The catering industry is indeed facing significant supply problems, notes Karine Goffi, Umih Regional President and Eastern Plain hotelier. Diana’s pond, for example, lost fifteen tons of its mussel production due to the heat. In addition to food, the price increase affects raw materials, energy and, inevitably, purchasing power, but also investment projects that professionals may consider in the longer term. The hospitality industry has specific problems related to the season (see also opposite). Of course we cannot change the prices of the rooms reserved in advance, but we adapt to the evolution of the market, with a lot of “last minute”. We used to have three tariffs (low, middle and high season), now the prices change daily.”

ALSO READ: On the town, shirtless or in a bikini: Tourists, go out covered!

While consumption patterns are changing so rapidly, the regional president points to other difficulties. Under “The Competition of Paracommercialism”, the parallel rental market hurting hoteliers. As well as “the lack of staff, which is particularly difficult for restaurateurs”a project of “CDI Tourism” envisaged in this regard by the Umih given the seasonal restrictions.

“Impossible Equation”

A problem that was also raised in crafts, which we regret “Many factories closed due to labor shortages”. Patrick Mias, himself a butcher and caterer in Ajaccio, addresses the difficulties linked to the current economic context. “Small businesses, specialty stores are less adaptable than large retailers, who are more easily able to absorb losses on certain products, he shows. In a shop like mine, when a kilo of salmon goes from 13 to 24.90 euros, or when the price of scallops triples, they just stop selling them because the customer doesn’t understand these impressive increases. And of course that applies to raw materials, materials, energy, gas, electricity, fuel. Local businesses are still trying as best they can to stay as close as possible to their customers’ expectations, but the situation is complicated. For reasons that escape us.”.

ALSO READ: Savings and sacrifices: in Ajaccio, the inflationary damage in the Salines district

In a recent press release, the leaders of Corsica’s U2P, relaying the concerns of business leaders at regional and national level, also underlined this “impossible equation” Between craft and inflation. “In the face of uncertainties caused by inflation, some are reducing the validity of their offers or reducing their travel times, increasing their response times, all cutting their margins, They insisted. The first wave of Covid, the second, the third, now we are on the seventh and there will be more. There are also shortages and price increases. The crisis exit device was only worth it if there was only Covid, but with everything we’re going through we can see we’re still in a crisis. If the government wants to restore purchasing power, it could start lowering fees for businesses.”they closed.

The call is restarted.

Corsica’s U2P is one of the three main regional employers’ organisations, representing two-thirds of the island’s craft and liberal businesses and bringing together five organizations for these business categories, namely the Confederation of Crafts and Small Businesses (Capeb), the General Confederation of Retail Food (CGAD), National Confederation of Trades and Services (CNAMS), National Union of Liberal Professions (UNAPL) and National Chamber of Public Works Crafts (CNATP).