loss-leader investment & finance definition

A product that is priced and advertised at very low levels to attract customers into a retail store. The price may be so low that the store loses money on the sale of the item. The hope is that customers will be enticed into the store by the loss leader, and while they are there will purchase other regularly priced items. The business recoups any money lost on the loss leader and marketing costs by selling more goods than otherwise would have been sold.