Monoprix, part of Groupe Casino, is reportedly in talks with Amazon over a partnership that will see Prime Now services offered to its customers in Paris.
French trade publication LSA reported this week that according to its sources, Monoprix is in advanced discussions with the online giant, which if completed, will mean that Parisian users of Prime Now will be able to purchase Monoprix products using the app, and have them delivered in one or two hours.
Prime Now already has a presence in Paris - it makes it deliveries from a warehouse in the city's 18th arrondissement - however a link up with one of the country's biggest retailers would increase its scale and reach considerably.
Looking To France
Last October, less than three months on from its purchase of Whole Foods, Amazon was linked with Monoprix for a wholly different reason - as a reported acquisition target.
Le Monde reported that the online retailer had 'approached French distributors to forge partnerships or make an acquisition', adding that Amazon was keen to 'take advantage' of the buying capacity of a major group.
The paper reported that Monoprix was in its sights to fulfil such a role, however Groupe Casino's message was clear: it was not for sale.
But a lot has changed since then.
In November, Groupe Casino announced that it was signing an international partnership with Ocado, to establish the group's Ocado Smart Platform (OSP) in France.
The platform, described as a solution to the ‘opportunities and challenges posed by shifting offline/online trends in grocery’ will be applied to Casino's Monoprix brand, to help boost its Monoprix.fr platform and ensure "precise and speedy delivery" of online orders, according to Jean-Charles Naouri, chief executive of Groupe Casino.
Commenting on the move, Barclays European Food Retail Equity Research noted that "on the positive side, this agreement will provide Casino [with] a competitive advantage in terms of technology."
A possible tie up with Amazon, if confirmed, would give Monoprix a 'short-cut' to offering such efficiencies, if, as is suspected, the rollout of the Ocado platform takes approximately two years.
Weighing The Options
But how likely is such a tie-up? As analysts Bernstein Research noted yesterday, "This is not the first time similar stories have been in the press but now the first result from a Google search of 'Monoprix Amazon' gives a link to a site with a branding "Monoprix at Amazon.fr", similar to what they call other partnerships."
While said link simply directs to an error page on the Amazon website, there's no smoke without fire, as the old expression goes.
Bernstein also notes that the proposed deal would be somewhat similar to the Morrisons-Amazon deal in the UK, where "Monoprix provides their products to Amazon on a wholesale basis in a similar way to the Morrisons-Amazon deal in the UK. This will provide additional capital light growth for Monoprix."
Learning From Spain
Groupe Casino shareholders concerned about the impact of an Amazon tie-up on the company's share price could also take heart from the success of the tie-up between Amazon and Spanish retailer DIA, which previously teamed up to offer Prime Now services in Barcelona and Madrid.
That deal, which sees DIA offer mainly its private label range via Prime Now, has led to increased sales - its Delicious premium own brand range, grew by 44% last year. In addition, it has been able to build a sales platform for its Clarel own-brand cosmetic range in markets in which it didn't previously have a presence.
Speaking to ESM recently, Amando Sanchez Falcon, DIA's chief corporate officer, described the Amazon tie-up as a "clear way of learning how to push our organisation further."
Let's see if Monoprix adopts the same mindset...
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
