E-commerce giant Amazon and French retailer Casino are expanding their partnership, with Amazon installing pick-up lockers in Casino stores and more of the French company's products to be available on Amazon.
The move, which follows an initial co-operation between Casino's upmarket Monoprix supermarket chain and Amazon in Paris, could re-ignite speculation of a bigger deal later on.
An Amazon spokeswoman said it had a policy of not commenting on market speculation. Amazon's purchase of bricks-and-mortar US food retailer Whole Foods Market last year has raised speculation it could seek to buy a European food retailer.
Extended Partnership
The extended partnership comes as Casino is selling assets and cutting debt to try to allay investor concerns over its finances and those of parent company Rallye.
The deal, unveiled on Tuesday, will see Amazon lockers installed in 1,000 locations across France in nine of Casino's brands, including Monoprix, Monop, Geant, Hyper Casino, CasinoSupermarche, Leaderprice, Viva and Spar by the end of the year. The lockers store Amazon products to be picked up by customers.
More Casino-branded products will also be available on Amazon, while Amazon and Monoprix will extend their partnership on Amazon's Prime Now grocery delivery service outside Paris and into new cities in the next twelve months.
'A New Step'
"This announcement represents a new step in strengthening Casino's omnichannel strategy to always be a little more in the heart of consumers' lives," said Casino's chief executive Jean-Charles Naouri in a statement.
Nevertheless, Casino's shares slipped 0.4% in early trade, after Standard & Poor's cut its credit rating on Casino to 'BB- negative outlook' from 'BB negative', pushing it further into junk territory.
Investment bank Morgan Stanley also kept an "underweight" rating on Casino's shares.
Monoprix, seen by analysts as similar to Whole Foods, started filling orders for subscribers to Amazon's Prime loyalty programme in parts of Paris last September.
Competition
This partnership has been closely watched as Monoprix was the first French retailer to agree in March 2018 to sell products via Amazon, causing a stir in the fiercely competitive domestic market.
France is Amazon's third largest market in Europe, after Britain and Germany. Amazon is the e-commerce leader in France with a market share of 17.3%, but its grocery market share stands at just 2%, according to Kantar data.
The US group, which has run its Amazon Prime express delivery service in Paris since 2016, has made no secret of its desire to launch a grocery delivery service in France as part of its ambitions to expand in food retail.
But the French supermarket sector has powerful incumbents such as Carrefour and Leclerc, operating at low margins and with a dense network of stores.
Casino has also said it would sell 12 Casino hypermarkets and 20 supermarkets to Apollo Global Management in a deal worth up to €470 million ($529 million).
News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.
