French Casino Guichard and Auchan Retail are considering an alliance to help both retail chains negotiate better prices with major consumer-goods makers and thus withstand competition from international players on the French supermarket sector.
Casino Guichard Perrachon SA and Auchan Retail are in exclusive talks to join forces through a purchasing alliance, reports Bloomberg on its website. With a partnership of this nature, the two French retail players are hoping to negociate better prices with national and international producers of consumer goods.
Pressure on the French supermarket sector is increasing: only last month Amazon confirmed its ambitions to launch its grocery service (Amazon Fresh) in France with a delivery deal involving Casino. The alliance that is currently on the table for Casino and Auchan is “one way of achieving some much needed purchasing scale”, says Bloomberg analyst Charles Allen, and “not just for Casino and Auchan, but for all traditional French retail players.” Both Auchan and Casino have already indicated that their current procurement partners would be able to take part in the alliance as well.
For Casino, the pact would replace the procurement tie-up it had previously with Intermarché , although it would cover “a smaller share of the French market than did the Intermarché agreement,” adds Allen. Nevertheless, both Auchan and Casino expect the new deal to help French suppliers develop abroad, all in accordance with competition rules. Auchan currently operates in 17 countries, Casino runs chains including Geant big-box stores, Casino supermarkets and the French e-commerce site C-discount.