Tesco and Carrefour form 'strategic alliance' to buy products

Tesco is forming a purchasing alliance with French retail giant Carrefour to secure better deals from suppliers in the consolidating, price-competitive supermarket business. 

The alliance between two of Europe’s largest retailers aims to use their joint buying power to deliver better prices to customers.

With combined sales of about $171bn, Tesco’s is the UK’s largest retailer and Carrefour is the largest retailer in Europe.

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The three-year alliance will cover strategic relationships with globals suppliers, the joint purchasing of own-brand products, as well as goods not for resale, according to Carrefour. 

In doing so, the partnership will “enable both companies to improve the quality and choice of products available to their customers, at even lower prices thereby enhancing their competitiveness," according to the press release.  

Carrefour’s 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.”

Tesco chief executive, Dave Lewis, added: “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.”

Grocers such as Tesco and Carrefour have come under pressure in recent years following the expansion of discounters such as Lidl and Aldi. 

Growing consolidation in the sector, such as the proposed Sainsbury’s-Asda merger, and Amazon’s entry into the supermarket business with the acquisition of Whole Foods, have also encouraged further competition.