Metro Group and Auchan have announced the launch of a new international purchasing alliance with two particular goals: the purchase of international FMCG brands and private label non-food items for its own brands.
"Unique worldwide collaboration"
The (currently still nameless) international purchasing alliance should become operational in November. According to both retailers, the alliance is unique on a worldwide scale, as it "combines for the first time the bargaining power of two leading companies, which operate two different business models with an ideal geographical fit", the press release states.
Auchan is the world's 11th retailer based on turnover (48.1 billion euro in 2013), active with hypermarkets and supermarkets in 16 countries. Metro portrays itself as a wholesale company in the press release, as it is not active as a retailer in the markets in which Auchan operates.
Metro's 2013 turnover reached nearly 66 billion euro through a worldwide network of 2,200 stores in 31 countries. Its wholesale activities are called Metro/Makro Cash & Carry, while its retail operations are bundled in MediaMarkt and Saturn (consumer electronics), Real (hypermarkets) and Galeria Kaufhof (department stores).
Improve supplier relations
The international FMCG brand products purchases are focused on "multi-national manufacturers who operate in highly concentrated markets", while the new partnership will buy private label non-food items through suppliers in Asia and Eastern Europe - passing through centralized purchasing entities based in Hong Kong and Shanghai.
"This agreement between two major actors of the sector is a great opportunity to develop business and to strengthen our relationship with our main suppliers", chairman of the board of Groupe Auchan, Vianney Muliez, said.
His Metro colleague Olaf Koch added: "We are convinced that both of our companies will benefit from the upcoming cooperation and the combination of expertise. We want to use the strengths of both organizations to capture maximum synergies towards our common suppliers and generate cost savings, which we can then pass on to our customers."