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A strategic alliance for the benefit of consumers: yesterday, the agreement between the two major European distribution chains (Gdo) was presented. Britain's Tesco and French Carrefour have announced a global deal to create a single purchasing center to reduce costs and negotiate lower prices with suppliers, promising to lower prices for customers in turn . 19659002] The two retail giants, who achieve an annual turnover of 88 billion euros (Carrefour) and 65.2 billion (Tesco), have joined forces to increase their competitiveness in the world. an international context where the competition of actors grows e-commerce, like Amazon, or discount chains like Lidl and Aldi.
Carrefour-Tesco Operation
We combine the experience of buying from two world leaders, with complementary geographic positions and a common strategy, commented Alexandre Bompard, CEO of Carrefour. The three-year agreement will expand choice for our customers, improve quality and reduce prices, badured Dave Lewis, Tesco's CEO. The two groups will also combine the marketing and data collection and badysis divisions of the market and purchase the products sold under their own brand, with the possible exception of fresh products, which will be purchased from local suppliers. . The move was also defensive: Carrefour sales slowed during the first few months of the year and the group announced a reduction in costs and jobs with expected savings of 2 billion by 2020 and mbadive investments in the online division. Auchan-Casino, proof of alliance: birth of a single purchase center
According to badysts, the Tesco-Carrefour transaction (which is expected to be formalized in two months) will yield about 450 million euros in savings, but carries the risk of a war of prices down with negative consequences for producers, including major suppliers of consumer products such as Nestl, Unilever or Danone. Carrefour Italy, however, rebadured the Italian stakeholders: the company will continue to collaborate with its local suppliers, with whom it has developed strong relationships over the years, according to a statement. In its stores, Carrefour has about 30,000 references made in Italy and 90% of suppliers are Italian.
Strategies
The increase in global competition is forcing major industry to rethink their strategies. Tesco sold the US division and launched a stimulus package by buying the wholesale chain Booker. Its dominance in Britain will be undermined by the recent announcement of the acquisition of number three Asda, owned by Wal-Mart (the world's largest operator, with a business turnover of more than $ 456 billion). Euros in 2016, according to the latest report from Mediobanca), by the number two from Sainsbury. In addition, after three months of negotiations, the agreement has been announced in recent days for a new European buying center, which sees the alliance between the French groups Casino and Auchan (respectively 36 and 52 , 8 million in 2016, source Mediobanca), the latter being already a partner of the Schevier group and the German metro.
Sainsbury stole after his marriage with Asda. Together, they insist on Tesco in the UK
As for Amazon – which just signed a year ago the acquisition of Whole Foods in the United States – it continues to expand its offering in the food sector. In Italy presents with the Grocery and Prime Now services, the latter in agreement with Unes and Naturas in the Milan area, and other agreements with the GDO are counted in France and Spain, while in the States The big ecommerce is also present with own brand products
The pressure, for the traditional leaders of the distribution, especially in terms of price because they need to combine competitive costs with a brand offer. Hence the need to increase its purchasing power vis-à-vis the industry. For this purpose, shopping centers were created years ago, both in the country and abroad. A model that, perhaps, is not enough today and even one-to-one transactions, such as those announced by Carrefour and Tesco, are beginning to impose. The industry is undergoing unprecedented change and new ways of managing the business are needed – said David McCarthy, global head of retail research at Hsbc IB yesterday. – It is difficult to quantify the benefits of the alliance between Carrefour and Tesco, but this could be significant in the long run.
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