Tesco has announced its intention to enter into a long-term, strategic alliance with French retail chain Carrefour, with the aim of improving quality and choice as well as lowering the price of own-brand products.
The alliance will cover the groups’ relationship with global suppliers, the joint purchasing of own-label goods and products not for resale.
Tesco, which generated total revenue of £55.9bn in 2017, and Carrefour, which generated total revenue of €78.9bn (£69.8bn) over the same period, hope the alliance will strengthen their relationship with suppliers. Both companies will continue to work with supply partners at a local and national level, including those used by Booker.
The alliance is expected to be formally agreed within the next two months.
Tesco Group ceo David Lewis said: “I’m delighted to be entering into a strategic alliance with Carrefour. By working together and making the most of our collective product expertise and sourcing capability, we will be able to serve our customers even better, further improving choice, quality and value.”
Carrefour chairman and ceo 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. This international alliance further strengthens Carrefour allowing it to reach a key milestone in the implementation of its strategy.”
Commenting on the partnership, NFU Mutual retail sector specialist Frank Woods said: “Tesco has already made it clear they want to place more emphasis on own-brand goods.
“Undoubtedly there will be some additional pressure on producers as a result. The larger buying group will seek to leverage its buying power, but some of the savings that consumers can expect to see will come from greater efficiency, as they will be able to de-duplicate buying processes.”