French retail groups Casino and Intermarché will not only purchase together, but will also develop digital services and produce private labels. It is the start of a redrawing of the French – and European – purchasing landscape.
International purchasing alliance
Casino Group and Intermarché have announced a strategic partnership for five years, in which, they say, they want to play off their complementary strengths. First and foremost, they will be purchasing together in their own country. Intermarché takes care of the negotiations in the food sector with the international brand manufacturers. Private labels, agricultural products, seafood and brands of small or medium-sized manufacturers fall outside the scope of the agreement. Casino will lead the non-food negotiations: these include technical products, paper products and textiles.
Outside France, the two groups will set up a purchasing alliance to “offer international services” to large industrial groups operating in Europe and Latin America. The alliance refers to a limited number of suppliers who, due to their scale or geographical footprint, have a dominant position in many product categories. Critical mass in the purchase of leading branded products ultimately benefits the consumer, both retailers say.
Digital services and private labels
It doesn’t stop there. Intermarché and Casino Group are also creating a joint venture to market a digital media offering to FMCG brands in France. Together, the partners have access to an enormous volume of transactional data and, with its RelevanC department, Casino already has considerable experience in digital communication. With this, both retailers want to offer an answer to the dominant position of “global players active in France”. Finally, Intermarché and its industrial arm Agromousquetaires will compete for contracts to produce private label products of French origin for Casino Group. The cooperation must of course be approved by the French competition authorities.
Musical chairs
The announcement of the collaboration comes shortly after Casino announced the end of its purchasing alliance Horizon – in which it worked with Auchan, Metro, Dia and Schiever. The renewed partnership marks the start of a game of musical chairs in the European retail alliances. After the departure of Edeka and Intermarché from AgeCore and the termination of Horizon, all food retailers are now looking for new partnerships. French retailers are leading the dance: due to the strict regulations on trading relations and price negotiations in France, they are the ones most likely to unite in order to strengthen their negotiating position. And since most French groups are also active internationally, these movements have an impact on the entire European market. Incidentally, this is not the first time Casino and Intermarché have come together: for four years they were together in the Incaa purchasing group, which ended in 2018.
