02 Jul Strategic alliance between Tesco & Carrefour

Earlier this year, Tesco’s £4bn takeover of Booker (UK’s largest wholesaler) has been completed, creating a new powerhouse in Britain’s £200bn-a-year food market. Not stopping there, Tesco now announces a long term “strategic alliance” with the France’s biggest retailer – Carrefour.

A HIGHLY COMPETITIVE GROCERY MARKET

The UK’s grocery market is frenetic and more competitive than ever. After the Tesco-Booker deal in March, the announced merger between Sainsbury’s and Asda in May (that may topple Tesco from its long-term position as the UK’s biggest grocer) … It is up to Tesco (again) to make a key announcement. Tesco and the France’s biggest retailer, Carrefour will start a strategic alliance that would cover strategic relationships with global suppliers as well as the joint purchasing of own brand products.

KEY STRATEGIC ALLIANCE TOWARDS SUPPLIERS & COMPETITORS

Without a doubt this partnership will increase their leverage with suppliers and deliver a competition boost with the ability to cut prices even further. In addition, Tesco and Carrefour will be able to improve the quality as well as the choice of products available to their customers.

Carrefour chairman and chief executive Alexandre Bompard said: “This strategic alliance between Carrefour and Tesco is a major agreement as it combines the purchasing expertise of two world leaders, complementary in their geographies, with common strategies […] This agreement is a great opportunity to develop our two brands at the service of our customers.”

Finally, it’s important to say that the alliance will be formally agreed within the next two months and the details are not clearly defined yet. Moreover, this announcement came two days after an international and French buying structure has been agreed between Auchan, Casino (working with Ocado technology – article HERE) and Métro in France.