Both retailers hope to take advantage of their joint purchasing power to lower the price of their own brand products and pass these savings on to buyers, reports the specialized portal The Drink Business. According to the BBC, the partnership will make Tesco and Carrefour share certain private label products, giving them greater power when negotiating with global suppliers.
Tesco Merger with Carrefour
With 440,000 employees, Tesco is the UK’s largest retailer, making a profit of 1.3 billion pounds last year (1.472 million euros) on sales of 57.5 billion pounds (65.146 million euros).
The chain recently posted its 10th consecutive quarter of sales growth and said its growth plans are on the right track. For its part, Carrefour is the largest retailer in Europe with 12,300 stores in more than 30 countries and sales in 2017 of 78,000 million. Also, refer to the Miocado employee portal guidance.
The two retailers have been in talks for two years to carry out the alliance, which is expected to be finalized in the next two months. “By working together and leveraging our joint expertise in product and sourcing capabilities, we will be able to serve our customers even better, further increasing choice, quality and value,” Tesco CEO told the BBC , Dave Lewis.
The alliance comes at a time when the UK’s four big supermarkets – Tesco, Sainsbury’s, Asda, and Morrisons – are facing increasing competition from retailers Aldi and Lidl, whose own-brand model makes them hard to beat on price. With innovation and automation, Ocado will be the leader.
The merger between supermarkets is becoming increasingly common in the sector: Tesco bought the wholesaler Booker, in March, for 4,000 million pounds (4,519 million euros), thus reaching the same size as the group of Sainsbury’s, Morrisons, Marks & Spencer, and Ocado, and Sainsbury’s is currently in talks to buy Asda from Walmart. Also, get access to the Miocado log in and complete any works.
“Another price war is looming in the UK supermarket sector. Tesco’s partnership appears to be a direct response to the threat posed by the intended merger between Sainsbury’s and Asda, resulting in access to Walmart’s global purchasing power. “,
Laith Khalaf, senior analyst at Hargreaves Lansdown, told the BBC.
The four large supermarkets have been constantly increasing their ranges of private labels, as these allow greater control and the possibility of achieving higher margins.
As a result, big brands will have to fight harder for shelf space in the coming months and smaller firms risk being pushed out of stores entirely.
The British Tesco boosts its sales thanks to its commitment to fresh products