Supermarket chains Tesco, Carrefour form strategic alliance

Britain’s largest grocery chain Tesco and French grocery giant Carrefour have joined forces on how they source and buy from suppliers in a bid to cut prices.

The long-term deal, which was struck amid mounting competition from Amazon and other rivals, allows the supermarket giants to jointly source certain products to lower prices and offer a wide range of product offerings to customers.

According to Tesco, the alliance will be governed by a three-year operational framework and will enable both companies to improve the quality and choice of products available to their customers at even lower prices.

Both companies will 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,” said Dave Lewis, Tesco Group chief executive.

Alexandre Bompard, chairman and CEO of Carrefour, said the strategic alliance between the two grocery giants is a major agreement that combines the purchasing expertise “of two world leaders, complementary in geographies with common strategies.”

The alliance will be formally agreed within the next two months, Tesco said in a statement.

The British retailer has trialled a few days ago a new “shop and go” technology that allows Tesco customers to pay for their groceries without visiting a till, just through a smartphone.

The retailer has given 100 company employees smartphones and use them to shop at its headquarters to trial the service. They use the phones to scan barcodes and pay for their shopping.

The experiment is similar to the technology Amazon has already adapted in its grocery store in Seattle.