Fuels: cost price or sale at a loss, what is really the difference?

After the “sale at a loss”, here is the one at “cost price”. Guest of TF1 and France 2 this Sunday evening, the President of the Republic called for new efforts to moderate fuel prices, which are now close to two euros per liter. If the possibility of selling diesel or gasoline at a loss will remain a “threat”, the Head of State called on those who can to sell “at cost”. But what is the difference between these two concepts?

On the one hand, selling at a loss is a process aimed at reselling a product “at a price lower than its actual purchase price”. This technique aimed at attracting customers while crushing competition is illegal, to the extent that it unbalances the market: “The fact, for any trader, of reselling or announcing the resale of a product as is to a price lower than its actual purchase price is punishable by a fine of 75,000 euros,” states article L442-5 of the commercial code. Only a few exceptions are allowed, including sales or “perishable products at risk of rapid spoilage”.

In mid-September, Élisabeth Borne announced that she wanted to add fuels to this list of exceptions, on a temporary and “exceptional” basis. Enough to allow “distributors to lower prices further”, argued the boss of the majority. This avenue has since been ruled out, following an outcry from the various players in the sector.

On the other hand, a sale at cost price consists of offering a product without making a margin on it. In other words, a banana will be sold without making any money. In this case, the distributor hopes to attract his customer with this good deal, to gain volume and make him buy other products at the same time. This measure is authorized. Large retailers also use it regularly, on an ad hoc and measured basis. Intermarché, for example, announced an operation, two days per month, until the end of the year.

The actors then take a loss, hoping to make a comeback on the side: “It is written everywhere that fuel is a loss leader. But for many, at Leclerc as at Intermarché, fuel represents 20 to 25% of turnover,” noted Michel-Édouard Leclerc this Sunday at JDD. For the consumer, the gain remains minimal, the margin made on fuel being low, of the order of one to three cents per liter, depending on the station. This measure is also most of the time carried out by large retailers, not by networks or independents, who cannot absorb this loss financially. “Saying that everyone must sell at cost price is not for lack of explaining to them that it is not possible,” annoys Francis Pousse, who represents 5,800 French stations, excluding large-scale distribution.