In a fierce battle against "shrinkflation," major European supermarket chains are taking on leading suppliers like Unilever and PepsiCo, but appear to have different strategies in mind. The chairman of E.Leclerc, France's largest supermarket chain, has made a surprising move by affirming his commitment to keep stocking PepsiCo products on their shelves, despite initially supporting Carrefour's decision to remove PepsiCo items from their stores in multiple countries.

Carrefour, a French supermarket group, recently announced their plan to eliminate PepsiCo products including 7 Up and Doritos from their stores in France, Italy, Spain, Belgium, and Poland. This decision came after Carrefour engaged in a long negotiation battle with PepsiCo and other brands over shrinkflation, where suppliers reduce the sizes and contents of their products without reducing prices. Carrefour had previously exposed PepsiCo by labeling their shelves, highlighting the product changes ahead of annual price negotiations. Similar negotiations were also initiated with other suppliers, such as Unilever and Nestlé, after observing similar shrinkage patterns.

While Carrefour enjoys the support of the government in this politically charged issue, convincing competitors to join in an all-out war against suppliers seems to be a more challenging endeavor. In a LinkedIn post, Michel-Edouard Leclerc, Chair of E.Leclerc, referenced Carrefour's decision to remove PepsiCo products, as well as their ongoing price negotiations with suppliers. He expressed frustration with rising inflation and the feeling of being deceived, stating that pressure is being exerted on suppliers during these negotiations. However, Leclerc emphasized that E.Leclerc is not yet escalating tensions to the extent of Carrefour's actions, as they prefer to convince suppliers to lower prices in order to increase revenues. Leclerc further mentioned his intention to request deflation from supplier Danone for E.Leclerc stores.

"I continue to sell Pepsi," Leclerc affirmed.

Leclerc's stance indicates some divisions among retailers in their approach to pressuring suppliers for lower prices, with E.Leclerc opting for a more passive approach. This strategy could potentially attract customers away from Carrefour and towards one of its major rivals.

PepsiCo stated, "We've 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 pricing strategies of major suppliers have recently faced scrutiny, as price increases have been attributed to supply chain shocks caused by the COVID-19 pandemic and Russia's invasion of Ukraine. However, recent research suggests that profiteering has played a significant role in the price rises. Now, as inflation levels decrease towards central bank targets of 2%, suppliers are facing mounting pressure to reduce the prices of their products.

As of now, representatives from E.Leclerc and Carrefour have not responded to Fortune's requests for comment on the matter.