EU: Brussels legislation could prohibit loss leaders, overhaul retail strategy
Under proposed European Union legislation, supermarkets could be forced to charge customers as much for all products as they pay their suppliers, putting an end to the practice of selling bread, milk and other staples as loss leaders to get customers through the door. This could undermine the strategy of several UK retailers, notably Wal-Mart's Asda, Tesco and Iceland, which have pursued a strategy of EDLP (everyday low prices). The legislation, which was first proposed in October last year, is intended to clamp down on sales promotions and BOGOFs (buy one get one free).
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