Loss Leader - GCSE Business Definition

A loss leader is a pricing strategy used by firms selling a product at a price below its cost to attract customers. This tactic is used to entice shoppers into a store or onto a website with the hope that while purchasing the loss leader, they will also buy other, more profitable items. It is commonly used in retail when overall sales volume is needed more than profit from individual product sales. For GCSE Business students, understanding loss leaders is essential for highlighting the balance between pricing strategies and consumer behaviour. It explains why businesses seek to drive traffic and maximise sales over time.