Supermarkets in France to run more ‘at cost’ fuel sales

Drivers in France are to be given even more opportunities to purchase petrol and diesel at cost price due to a new cooperative agreement between the government and supermarkets.

Major supermarket chains E.Leclerc and Carrefour announced yesterday (September 26) that their service stations would expand offers to sell fuel at cost price to cover the entire week, and not just weekends, until at least the end of 2023.

The CEO of E.Leclerc announced that the cut-price petrol deal will start from this Friday (September 29).

“It's the biggest operation to sell fuel at cost price in our history,” said Carrefour on their official social media page on X (formerly Twitter). Carrefour will also start the cut-price deal from Friday.

Other supermarkets will continue to sell fuel at cost price on certain weekends, with the government saying the new agreement meant there would be “over 120,000 opportunities” to buy fuel at cost price from 4,000 service stations across the country.

Supermarkets – and service stations – collectively ruled out selling fuel at a loss last week, after the government hinted that they would look to temporarily change a previous law banning them from doing so.

The reintroduction of the €100 fuel aid was also announced earlier this week, and is set to be available in early 2024.

Numerous supermarkets will take part

As part of the deal, Carrefour has offered to sell the fuel at cost price at more than 200 of its hypermarkets across the country.

Casino and Intermarché service stations will sell fuel at cost price two weekends per month, with Système U and Auchaun committing to selling it at cost price at least one weekend a month.

More information is expected to be released soon.

For the government, the announcement of “120,000 opportunities” comes from combining the total number of stations offering the cut-price fuel and the number of days they are doing so.

The government is not including TotalEnergies’ commitment to cap fuel prices at €1.99 until at least 2024 in their figures.

Scheme will hit chains’ profits

Selling fuel at cost price will of course impact supermarket profits – generally, larger suppliers make a profit of about 2c per litre they sell to customers but this evaporates at cost price.

In fact, selling at cost price creates a loss on fuel trading for service stations as the overheads for transportation and storage of the fuel still remains.

Economic analyst Bryan Garnier estimates that Carrefour’s final-quarter profits will take a €20million dip due to the scheme, although the supermarket giant says this is an overestimation.

By selling the fuel at cost price in their hypermarkets, Carrefour – and other supermarkets – are banking on visitors refilling their car also choosing to do their household shopping at the store, partially offsetting the balance.

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