What happened? The latest edition of Olivier Dauvers'' French grocery price survey has been released (conducted early June). While we do not publish on this every month, we think today''s release is of note. Leclerc, which showed its first period of Kantar market share losses for at least 2 years in March, has improved its price index vs. the market by 80bps in May on top of a 50bps improvement in April. Having seen its relative price gap narrow across 2024, its relative index is now within striking distance of the widest it has ever been (today''s index 90.7 vs all time low 90.3). At 6.9% (cheaper) Leclerc has improved its relative position c.170bps from its recent low of 5.2% vs. Carrefour hypermarkets in July 2024. See Exhibit below for long term history of price gap under this survey. NOTE: Dauvers notes that this price survey does not capture loyalty card discounts, which Carrefour highlighted are where some of their investments are now focused with the 1Q results. However, while this survey does have its limitations, it is across 1,000s of SKUs and 1,000s of Drive sites across France, making it by far the most comprehensive survey we have access to (and with 10 years of monthly history). BNPP Exane View: Carrefour has been very focused on, and indeed successful in, closing the price gap vs Leclerc. However, with a history of targeting market share through price leadership (partially enabled by its franchise model - see discussion here), as Leclerc saw its market share growth slow in 2024/25, a lingering concern has been whether they would look to re-open price gaps vs the market. Since the end of the February price negotiations, it has now improved it price gap 110bps vs Carrefour hypers and 170bps vs both Intermarche and Systeme U hypers. While overall French grocery market growth has improved in recent months, a step up in price competition from the market leader Leclerc could prove problematic for Carrefour, who have already guided that...