loss-leading

loss-leading

the practice of retailers in selling a particular product at a price below bought-in cost in order to attract customers into the store, hoping that they will then be encouraged to make other purchases. This constitutes a form of retailer discrimination against manufacturers and is usually outlawed by competition law. See COMPETITION POLICY (UK), RESALE-PRICE MAINTENANCE, RESALE PRICE ACTS 1964, 1976.
References in periodicals archive ?
Allowing this loss-leading behaviour also enables incumbents to control access to the market - it is one of the reasons why there is more consumer choice in savings than in current accounts.
That money is being used by the Big Six suppliers to hook in new customers with loss-leading tariffs.
Namely, the high cost of stock, aggressive discounting both on the High Street and on the internet, low margins and industry loss-leading on products such as contact lenses, 25 [pound sterling] glasses and services such as 5 [pound sterling] eye tests and free contact lens consultations.
EDF Energy said: "EDF Energy does not participate in loss-leading trading activity and considers it to be against existing market regulation.
More densely populated cities have always effectively subsidized mail service to the loss-leading countryside.
The ideas behind the work include highlighting a fading business, with a strange mix of needlepoint on the breakfast room walls reflecting loss-leading labour and a fear of the everchanging, contemporary world.
Certain lenders fell over themselves to meet lending targets by offering loss-leading rates.
They take advantage of loss-leading deals in supermarkets and off-licences, where booze often costs less than bottled water, and sozzle themselves into unrestricted oblivion on the sofa in front of the telly.
It has been hailed as one of the most successful consumer groups in Europe and continues to push for fair taxes on beer, minimumpricing regulations to stamp out loss-leading beer in supermarkets and a zero duty rate on low strength beers, as well as planning law reforms to protect pubs.
James Lowman, chief executive of the Association of Convenience Stores, said supermarkets would put on more loss-leading deals than normal, particularly on alcohol, which would be "a key battleground".
This more than offset the loss of existing credit card balances caused by the bank's refusal to compete directly with card companies offering loss-leading interest rates to win new business.
Many of the larger free ISP operators, such as Dixons or Virgin, are commonly held to use their ISPs as loss-leading marketing tools - used to direct customers into their e-commerce sites.