Tesco announces "strategic alliance" with French retail giant Carrefour

Tesco has announced a plan for a “strategic alliance” with French grocery giant Carrefour, with the duo’s joint buying power expected to cut costs and present customers with lower prices.

The two companies said the alliance would also improve the quality and choice of products available, while creating “significant opportunities” for suppliers.

The deal could lead to more French products, including wine, being sold in Tesco stores. The two companies could also reduce costs in areas such as legal services and accounting.

Tesco chief executive, 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,”

The move comes as the grocery retail environment continues to go through a period of change.

Tesco recently completed the purchase of wholesaler Booker and earlier this year Sainsbury’s said it was in talks to purchase Asda.

Consolidation in the market has been rapid as retailers have worked to counteract the increasing competition from popular discount chains Aldi and Lidi and online retailers, such as Amazon. And last year Amazon itself bought Whole Foods, giving the internet retailer a high street presence.

Meanwhile, France’s Auchan Retail, Casino Group and Schriever Group recently teamed up with Germany’s Metro, internationally and in France.

Tesco is the UK’s largest grocery retailer while Carrefour is the largest supermarket retailer in Europe.

Carrefour has 12,300 stores over 30 countries. Last year it revealed a major transformation plan for the business with plans to cut costs and increase its investments in e-commerce.

In a statement, Carrefour Group chief executive Alexandre Bompard said: The international alliance further strengthens Carrefour allowing it to reach a key milestone in the implementation of its strategy.”

He noted that the deal was “a great opportunity to develop our two brands at the service of our customers”.

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