“We’re experiencing
the beginning of the repercussions of the financial crisis,” said Michel-Edouard
Leclerc on Wednesday during an
interview on Europe 1, France’s largest radio
network. He is the CEO of the second largest retailer in France, E. Leclerc, a
privately owned cooperative association with 555 stores—mostly hypermarkets—in
France and 117 stores in other countries.
Sounding like a CEO one minute and like a populist presidential candidate the
next, he emphasized that his company has done relatively well in 2011, sales
being up 5%. Strategy: offer deals and cut prices. The whole industry, he said,
“ate up inflation” with their margins, but his stores were particularly
aggressive as shoppers have become less spontaneous and much more concerned
about price. In his 30 years in the industry, he has never seen so much
“rational behavior among consumers” and so much “fear of getting screwed.”
Until now, the financial crisis of 2008 has touched mostly the financial
world, he said, but in 2012, it would impact the real economy. “I’m very
worried,” he said. All the "stupidities" going on before the financial crisis,
the speculative building bubble in the suburbs of Madrid or in Florida, or the
"Madoffs" all over the place, there was so much waste, but... “It’s always the
people who end up paying.”
How? “Higher VAT, higher taxes on drinks, on garbage collection, all that
will go up. And then there is inflation. This year, we haven't seen too much of
it, but it’s still about 3%.” Yet salary increases haven’t kept up with it, so
it hit household purchasing power.
“Inflation in 2012 is arriving ominously,” he said. “Suppliers, who couldn't
pass on their price increases because we opposed them, are coming back to us”
and demand higher prices because their costs have gone up, in some cases by
20%.
“Companies have been bled dry,” he said. “Banks are making them pay more for
their loans. Price pressures have built up in the supply chain. And everybody
will try to unload price increases on the French.” The loss of purchasing power
would be a major threat in 2012 and could push consumer spending into a
recession, he said.
And what would he tell the next government after the election in May? “Stop
listening to this financial world, these ratings agencies.” The government has
to keep control of its strategy, he said. “According to the ratings agencies, it
would be necessary to put France on a diet. But if there is no growth, we'll
never be able to pay back our debt.”
“We have to shoot all these guys that come to give us lessons,” he said. “I
believe that’s the real combat of our society. We, the actors in the real
economy, must regroup so that we won’t be eaten up by these guys.”
"It wasn't the Italians that threw out Berlusconi, it was the ratings
agencies. That's not normal. And it's not normal either that Monti was
‘non-elected’ by the ratings agencies. We have to master our own destiny once
again. That’s the job of all of us.”
On the other side of the Rhine, the solution to the
crisis is focused on reducing debt and repairing budgets—the dictate of M.
Leclerc’s beloved ratings agencies. Amidst these tensions, Beatrice Weder di
Mauro, member of Germany’s Sachverständigenrat—a council of economic experts for
the government—was asked if the euro would break apart in 2012. "That would be
bad for all involved,” she
said, “but it cannot be excluded."
Oops. And in Germany, companies are getting ready
for the end of the euro. Theoretical exercises for a hypothetical scenario, they
call it. The latest was Herbert Hainer, CEO of Adidas, second largest sportswear
maker in the world. Adidas, he
said, “will be prepared to go back to local
currencies if necessary." But now the public is told to prepare for the demise
of the euro, too....
When the Previously Unthinkable Becomes a
Planned Event.
Belgium is already teetering. To bail out its banks,
it guaranteed €138 billion in debt—35% of its GDP! For that whole debacle, and
why
finally someone is getting sued, read....
CEO of Dexia: ‘Not A Bank But A Hedge
Fund’.
二零一一年十二月三十一
