Carrefour and E.Leclerc, France’s leading supermarket chains announced to start selling fuel at its cost price. They agreed to forego all profit on the fuel sales.
The decision made by the companies is aimed at reducing the cost of fuel for consumers amid the high cost of living.
Before this decision, the government and fuel retailers held a meeting. The meeting was aimed at finding solutions to cushion citizens from the high cost of living.
Carrefour described the initiative as “the largest cost-price fuel sales operation in our history”. The statement was released on their social media X, formerly Twitter. According to the statement, the supermarket will implement this new pricing strategy daily until the end of the year.
The French President, Emmanuel Macron, has announced plans to request the fuel industry to sell at cost price. A meeting with industry representatives is expected to take place this week to discuss a no-profit approach to fuel sales.
Though the announcement is a major step towards addressing the high cost of living, its sustainability is questionable. Stakeholders in the industry may have a harder time accepting the move since its long-term feasibility is not guaranteed.
According to InvestingPro Tips, Carrefour has consistently increased its earnings for 32 consecutive years. Consequently, the company may have a strong financial position to support the initiative.
Carrefour in Kenya
Read also: Why the Cost of Fuel is High
Meanwhile, Carrefour Supermarket has 19 branches in Kenya. Since opening its first branch in 2016, the retailer’s sales have increased from KSh 26.2 billion in 2021 to KSh 32.9 billion in 2022, competing with local retailers such as Naivas.
This move by Carrefour comes amidst reports of Kenya having the 12th most expensive fuel in Africa. This was mentioned in a review by the Energy and Petroleum Regulatory Authority (EPRA).
“.. The 750 service stations of Leclerc hypermarkets will be selling petrol at cost price’ every day. This, of course, means with no profit,” Michel-Edouard Leclerc, president of the E. Leclerc group, wrote on X, formerly Twitter.
Carrefour made the same commitment Tuesday, saying on X that fuel would be sold “at no margin” in all of its hypermarkets “every day, from this Friday until the end of the year.”
Leclerc then framed this as an “act of solidarity with all customers frightened by the price increases and whose purchasing power is greatly impacted.”
To help people cope with inflation, the French government initially considered lifting a ban on fuel being sold at a loss but revised its plan in the face of opposition from distributors.
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