Carrefour and E.Leclerc to sell fuel at cost price in France

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Carrefour and E.Leclerc to sell fuel at cost price in France

France's leading supermarket chains, Carrefour (EPA: CARR ) and E.Leclerc, announced on Friday that they will begin selling fuel at cost price, a move aimed at alleviating the high cost of living for consumers. This decision comes ahead of a crucial meeting between the government and fuel retailers.

Carrefour, owned by Dubai-based Majid Al Futtaim, described the initiative as "the largest cost-price fuel sales operation in our history" in a statement released on social media. The supermarket chain will implement this new pricing strategy daily until the end of the year. Carrefour is a prominent player in the Consumer Staples Distribution & Retail industry, according to InvestingPro Tips, and has an adjusted market cap of $46.86 billion, as per InvestingPro Data.

E.Leclerc, which had previously offered fuel at cost price during summer weekends, has extended the initiative to seven days a week. The company's president, Michel-Edouard Leclerc, emphasized that this was an "act of solidarity with all customers alarmed by the price increases", acknowledging the significant impact of these hikes on consumer purchasing power.

French President Emmanuel Macron has announced plans to request the fuel industry to sell at cost price and distribute 100 euro grants to the country’s most disadvantaged workers who commute to work. A meeting with industry representatives is expected to take place this week to discuss a no-profit approach to fuel sales.

While this announcement signifies a significant step in addressing rising living costs, its long-term feasibility and acceptance among all stakeholders remain uncertain. According to InvestingPro Tips, Carrefour has consistently increased its earnings per share and has maintained dividend payments for 32 consecutive years, suggesting the company's strong financial position could potentially support such initiatives.

Meanwhile, Carrefour Supermarket continues to expand its presence in Africa, with 19 branches in Kenya and seven in Uganda. Since opening its first branch in Kenya in 2016, the retailer's sales have increased from KSh 26.2 billion (USD1 = KES148.150) in 2021 to KSh 32.9 billion in 2022, competing with local retailers such as Naivas. This comes amidst reports of Kenya having the 12th most expensive fuel in Africa, following a review by the Energy and Petroleum Regulatory Authority (EPRA). For more insights like these, consider accessing the additional 15 tips available on InvestingPro.

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