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The ECB suggested prices were likely to rise less in countries where retailers were prepared to use profit margins as a buffer, especially if fears about the economic outlook made them reluctant to pass on price increases.

I don't know about "fears about the economic outlook", but there's a rather particular situation at the moment in France WRT big retail distribution. On the one hand, Sarko is pushing for the big chains to reduce or moderate prices, and we hear (propaganda?) reports of cheating since the euro came in, etc. On the other the same retailers are hoping for liberalisation, especially of the rules re new store opening and Sunday trading. I'd expect a quid pro quo: they will take a hit to their margins if they get what they want on the liberalisation side.

by afew (afew(a in a circle)eurotrib_dot_com) on Fri Dec 14th, 2007 at 04:27:59 AM EST
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