RetailDetail EU
Europe - EN
  • België - NL
  • Belgique - FR
  • Nederland - NL
  • Europe - EN
  • About us
  • Contact
  • Subscribe
  • Sign in user
  • News
    • Food
    • Fashion
    • Home
    • Electronics
    • Beauty/Care
    • DIY/Garden
    • Leisure
    • General
  • RetailDetail Plus
  • Events
  • Hunts
  • RetailHub
  • Advertising & Partnerships
    • EVENT PARTNERSHIPS
    • PRINT ADVERTISING
    • ONLINE ADVERTISING
RetailDetail EU
Europe - EN
  • België - NL
  • Belgique - FR
  • Nederland - NL
  • Europe - EN
  • About us
  • Contact
  • Sign in user
  • News
    • Food
    • Fashion
    • Home
    • Electronics
    • Beauty/Care
    • DIY/Garden
    • Leisure
    • General
  • RetailDetail Plus
  • Events
  • Hunts
  • RetailHub
  • Advertising & Partnerships
    • EVENT PARTNERSHIPS
    • PRINT ADVERTISING
    • ONLINE ADVERTISING
thumb
Written by Stefan Van Rompaey
In this article
  • Companies AgeCoreEdekaINSEAD
  • Geography Germany
Share article
  • facebook
  • instagram
  • twitter
  • linkedin
  • email

How retail alliances lead to lower consumer prices

icon
Food24 June, 2022
Shutterstock.com

New research proves that buying alliances do lead to lower prices for consumers: customers of German supermarket chain Edeka paid on average 12% less for products the retailer purchased through retail alliance AgeCore.

Controversial alliances

International buying alliances of European food retailers are controversial: according to some brand manufacturers, they only serve to increase the profit margins of the retailers involved, and only add costs to the supply chain. According to retailers, however, alliances are a necessity in order to create a more level playing field in negotiations with multinationals and lead to lower sales prices in the stores.

Until now, there has not been much empirical evidence to support this claim. A recently published study by Professor Marcel Corstjens of business school INSEAD changes all that. The study, entitled International Retail Buying Groups: A Force for the Good? The case of AgeCore/EDEKA, examines whether the membership of German market leader Edeka in the international purchasing alliance AgeCore has led to lower consumer prices as a result of better purchasing conditions (in the meantime Edeka has left the alliance to found the new purchasing group Epic Partners).

On average 12% lower prices

The study compares retail prices for products negotiated by AgeCore with prices for products that were not negotiated by the alliance. No half measures: the study includes a total of over six million scanner data items for 138,000 stock-keeping units (SKUs) from twenty food categories based on monthly observations over a six-year period. The method was refined according to turnover and product category, to avoid unwanted overestimates.

What does it show? Average monthly consumer prices for SKUs in a specific product category negotiated by AgeCore were on average 12% lower than those of similar SKUs outside the AgeCore negotiations. The effect varies from -36% in the frozen food category to -6% for snacks. In a few categories – beverages, for instance – AgeCore prices are higher. Only three product categories show no statistically significant effect: bakery products, plant-based dairy products and delicatessen.

“Trickle-down effect”

The results of this study are in line with previous studies on the impact of purchasing alliances. In 2019, research showed that bottled water in France became 7% cheaper as a result of negotiations by three national purchasing groups. And a 2020 study of the alliance between Metro and Auchan indicated a reduction in consumer prices of 5% to 7% – also in France. 

This new study is by far the most comprehensive of its kind. Even though more research is needed on factors that may cause exceptions in some categories, “it seems reasonable to state that international retail buying groups do in fact contribute to enhanced competition and level playing field negotiations between (predominantly) national food retailers and multinational brand owners, and that better buying conditions do result, via a ‘trickle-down effect’, in lower average consumer prices,” the paper concludes.

Stay up-to-date

Receive our free newsletters and do not miss out on the latest retail news.

Subscribe
logo

New research proves that buying alliances do lead to lower prices for consumers: customers of German supermarket chain Edeka paid on average 12% less for products the retailer purchased through retail alliance AgeCore.

More on Food
See more
  • icon
    Food9 June, 2023
    Hopla: how Carrefour is getting started with ChatGPT

    In France, Carrefour is launching Hopla, an artificial intelligence chatbot that helps customers do their shopping. The retailer is also using generative AI for some internal processes, such as purchasing and product sheets.

  • icon
    Food8 June, 2023
    Frans Muller (Ahold Delhaize) and Dirk Van de Put (Mondelez) co-chairs The Consumer Goods Forum

    The Consumer Goods Forum, a global organisation that wants to enhance cooperation between retailers and consumer goods manufacturers, has appointed CEOs Frans Muller (Ahold Delhaize) and Dirk Van de Put (Mondelez) as co-chairs.

  • icon
    Food7 June, 2023
    [Interview] Douglas Lamont (Tony’s Chocolonely) holds up a mirror to ‘big chocolate’

    Big chocolate manufacturers got away smoothly with price increases of up to 20 % last year, but continue to refuse to pay cocoa farmers a living wage. The excuses are running out, Tony’s Chocolonely top executive Douglas Lamont believes.

Events
  • 15
    Jun
    Human Resources & People Congress
  • 29
    Jun
    Food Congress
Most read
  • icon
    Leisure16 May, 2023
    Decathlon launches subscription service in Belgium
  • icon
    General15 May, 2023
    Action launches Belgian webshop
  • icon
    Food30 May, 2023
    1,000 jobs at risk at Carrefour France?
  • icon
    Fashion23 May, 2023
    Zara goes secondhand, Massimo Dutti goes US
Follow RetailDetail
  • socialFacebook
  • socialTwitter
  • socialInstagram
  • sociallinkedIn
footer-logo
RetailDetail, the leading b2b-retailcommunity in the Benelux, keeps retail professionals up-to-date by means of online & offline publications, retail events, inspiring retail hunts and the unique co-creation platform retailhub, where retailers and their suppliers can experience the future of shopping.
RetailDetail Mailing Address:
Kolveniersstraat 7, bus 26 
2000 Antwerp
Visiting address:
Stadsfeestzaal – Meir 78 
2000 Antwerp
How to reach us:
Directions
© 2023 RetailDetail
general conditions | privacy policy
+32 3 500 89 59 info@retaildetail.be
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept All”, you consent to the use of ALL the cookies.
Accept All
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Non-necessary
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
SAVE & ACCEPT