PRICE WAR – The number one food retailer in France, which has made its brand price low, is preparing to guarantee, for one year, a 10% or 20% discount compared to the regulated tariff of EDF.
Thirty years after attacking fuel, Michel Edouard Leclerc intends to conquer a new market: electricity. The number one food retailer in France launches this Thursday an offer guaranteeing a discount of 10% or 20% compared to the regulated tariff of EDF. Goal ? Conquer three million customers by the end of 2025, about 10% of the French market. "Our commitment is to be the cheapest in the market," said the chairman of the group of independent distributors in Reuters, saying it was "clear goal" to take market share to its competitors by sacrificing margins.
In detail, the discount on the electricity bill, valid for one year, reaches 20% on the standard rate provided to convert the discount obtained into purchase orders to spend in Leclerc signs, of course. Otherwise, the decline will be limited to 10%.
The distributor intends to retain its customers but also attract new customers in a French market distribution undermined by competition, the price war and the threat of Amazon. This offer also allows it to save on customer acquisition costs.
"We are clearly seeking to satisfy and favor a customer who already knows us," said Michel-Edouard Leclerc, for whom there is "a premium to distributors who offer now an offer in a market that will grow." As a reminder, the distributor has more than 18 million customers, including 14.2 million cardholders, he said.
Less than 100,000 customers per month for EDF
Leclerc is not the first distribution group to start supplying electricity. A year ago, Cdiscount, an online trading subsidiary of Casino, had started the step claiming for its part tariffs 15% below regulated tariffs. Thanks to their cheaper offers than regulated tariffs set by the State and applied to EDF's customers, alternative electricity distributors such as Engie, Italian Eni or Total have gained market share in recent years in France. . And that is to say if the cost is hard for EDF which loses nearly 100,000 customers a month under the pressure of these new players.
According to figures from the French Energy Regulatory Commission (CRE), EDF's market share in the private customer segment fell to around 81% at the end of March 2018, compared with 85% a year earlier. . Nearly 6 million French households have already made the choice to reduce their bill with alternative offers.