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Tesco and Carrefour alliance to launch in October

The alliance will cover the companies’ relationships with global suppliers.
The alliance will cover the companies’ relationships with global suppliers.

Supermarket giants Tesco and Carrefour have formally entered into a strategic alliance, with plans to begin cooperation in October.

 

The alliance will cover the companies’ relationship with global suppliers, including joint purchasing of own brand products and goods not for resale. Each company will continue to work with supplier partners at a local and national level.

 

The partners have agreed a three-year operational framework, details of which were not disclosed, to govern the deal.

 

Tesco and Carrefour first mooted the deal at the beginning of July. Speaking at the time of the agreement at the beginning of July, Tesco CEO Dave Lewis said:

 

“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.”

 

Alexandre Bompard, Chairman and CEO of Carrefour Group, said the agreement was "a great opportunity to develop our two brands at the service of our customers."

 

Martin Shaw, Head of Research at InternetRetailing’s RetailX, said the deal was a logical decision for two companies with little competitive cross-over.

 

“They are global chains buying in a global market, so working together drives down their buying costs. If they go into a room together with Unilever they can get a better deal.”

 

Tesco CEO Dave Lewis has steered the UK retailer back towards sales growth after a damaging accounting scandal.

 

Meanwhile, Carrefour is currently undertaking its "Carrefour 2022" transformation plan, announced in January. The French chain aims to simplify its organisation, boost productivity, invest in digital and target growth in high quality food sales.

 

By numbers: Tesco and Carrefour

Tesco:

2017 revenue: £55.9 billion

Employees: 460,390

Market capitalisation: £25.73 billion

 

Carrefour:

2017 revenue: €78.9 billion

Employees: 380,000

Market capitalisation: €12.41 billion

 

Image credit: Tesco

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