UK retailer Tesco and French supermarket giant Carrefour, Europe’s two largest retailers, have announced a strategic purchasing alliance as both companies seek to lower costs in the face of intense competition in the retail sector.

As part of the deal, both supermarkets will jointly purchase own-brand products from suppliers, which they say will improve the quality and choice available in their stores, while also lowering prices. In effect, Tesco and Carrefour will use the weight of their combined buying power to squeeze better deals from their suppliers of own-label products.

Tesco, which buys products from almost 500 Irish food and drink companies and exports circa €700m worth of Irish food and drink, says the alliance with Carrefour will strengthen its relationships with suppliers and create significant opportunities.

Tesco and Carrefour hope to formally agree the deal within the next two months.

Alliance

“I’m delighted to be entering into a strategic alliance with Carrefour. By working together and making the most of our collective product expertise and sourcing capability, we will be able to serve our customers even better, further improving choice, quality and value,” said Tesco chief executive Dave Lewis.

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Tesco signs purchasing deal with French retailer Carrefour

Europe’s two largest supermarkets have signed a purchasing alliance in a bid to lower their cost bases.