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Tue, 03 Jul 2018 – 5:50 AM
Geneva
TESCO Plc forms a purchasing alliance with French distributor Carrefour SA to strengthen its influence with suppliers in a supermarket business consolidated and under pressure. 19659003] The alliance between two of Europe's largest retailers, with combined annual sales of about $ 171 billion, will manage purchases of branded products and private label products, companies said in a statement. joint communiqué issued Monday
. We expect to conclude the agreement in the next two months, and this would last three years.
"It's a defensive move," said Charles Allen, an analyst at Bloomberg. "There is little growth in the UK or France, Tesco and Carrefour are trying to achieve all possible savings."
European supermarket operators have embarked on a series of acquisitions and alliances to reduce procurement costs In the UK, grocer J Sainsbury Plc plans to 39, buy Asda from Walmart Inc., while Auchan Retail International SA, Casino Guichard-Perrachon SA and Schiever Group announced last week that they would join forces with those of Metro AG in Germany. 19659003] This is in addition to the deflationary pressures faced by food producers like Nestlé SA and Unilever, as British grocers struggle with the additional effect of a low pound sterling from the vote. to leave the European Union
. However, purchasing synergies for cross-border transactions in food distribution have been very difficult to achieve historically, "said Berenberg analyst Dusan Milosavl-Jevic, citing French partnerships between Auchan and Systeme U cooperative, Carrefour and retailer Cora, and Casino and Intermarché.
Tesco purchased wholesaler Booker Group Plc, which supplies thousands of convenience stores, in March.
Under Sainsbury Walmart will retain a significant minority stake, allowing 39, British grocer to exploit the strength of the US retail giant's purchase of the purpose of reducing by 10% the prices of essential items.
Alexandre Bompard, CEO of the company last summer Carrefour decided to reinforce its e-commerce activities and reduce its dependence on suburban supermarket
Competition in France warms up, Casino announcing in March an agreement to sell its Monoprix stores via Prime Service of Amazon.com Inc. in the Paris region, following an agreement last year between Casino and Ocado Group Plc ecommerce technology provider Ecoplat.
Tesco is aiming for an opera margin of 3.5% to 4% by 2020, compared to 3%
The company is rebranding all of its 10,000 branded products under its own brand name. reduce prices of meat, fruits and vegetables this year
Tesco and Carrefour said their alliance would allow companies to improve the supply of goods available in stores. The agreement will also cover the purchase of goods not intended for resale, according to the companies. BLOOMBERG
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