Tesco & Carrefour announce long term “strategic alliance”

The UK’s biggest retailer has joined forces with France’s biggest retailer in announcing an intention to enter into a long-term, strategic alliance.

The alliance between retail giants Tesco and Carrefour, set out in a statement circulated this morning, aims to increase their leverage with suppliers and deliver a competition boost with the ability to cut prices even further.

The alliance would cover strategic relationships with global suppliers as well as the the joint purchasing of own brand products and goods not for resale.

It will be governed by a three-year operational framework and it is anticipated that the alliance will be formally agreed within the next two months.

The announcement comes less than three months after Sainsbury’s and Asda announced plans for a £12 billion mega merger that could topple Tesco from its long-term position as the UK’s biggest grocer in terms of market share.

In addition, earlier this year Tesco completed its £3.7 billion acquisition of wholesaler and convenience store operator Booker.

In its statement this morning, Tesco and Carrefour said their alliance would enable both retailers to improve the quality and choice of products available to their customers, and cut prices even further.

The alliance also aims to strengthen the retail giants’ relationships with their suppliers, as well as continue to work with supplier partners at a local and national level.

“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,” Tesco chief executive Dave Lewis said.

Carrefour chairman and chief executive Alexandre Bompard added: “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.”