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French supermarket company Auchan will invest 20 million euro to construct a new campus in a suburb of Lille, called Villeneuve-d’Asq. Additionally, it will launch a purchase alliance with Système U.
Investment plan
The main reason to build a new campus, which should become fully operational at the end of 2019, is to bring several services (like finances, IT, purchase and the legal division) together for the entire group.
The new campus is part of Auchan’s major investment plan, which will cost 1.3 billion euro. Not only will it use the funds to completely remodel its hypermarkets and supermarkets, but it will also invest a lot into the digitization of several services.
Purchase alliance
At the same time, Auchan strengthens its collaboration with Système U. After it had given Système U a mandate to negotiate on its behalf when it comes to purchasing, it will now create an actual purchase alliance.
It will be called Alliance and once again confirms the two retailers’ willingness to collaborate, although it remains to be seen whether the French Bureau of Competition approves the deal.
It comes as no surprise both companies have launched a joint initiative, because they both indicated they would like to strengthen their bonds in 2015. Back then, they intended to exchange part of their store networks: Auchan would obtain several of Système U’s hypermarkets and would give more than 250 Simply Market supermarkets in return. However, that deal never materialized. This new deal clearly shows that the two companies have not let that previous failure get in the way of another approach.
It is not Auchan’s only French collaboration, because it also has a household appliances-focused purchase alliance with Boulanger. Both arrangements are meant to keep suppliers’ prices as low as possible.
