Germany's Metro Group and France-based Auchan have signed an agreement for a new international purchasing partnership.
The strategy will help the retailers to strengthen purchasing contracts with suppliers and generate cost savings on orders, leading to lower prices for shoppers.
Two agreements between the parties will utilise the strengths of Auchan and the wholesale and food retail divisions of Metro. An international cooperation agreement will enable joint negotiations on specific international services and conditions for key international suppliers of A-brands. In addition to this, an international sourcing agreement will allow Metro and Auchan to carry out joint worldwide purchases of non-food products. The retailers will sell these non-food items as private-label products to customers. Speaking on the deal, Olaf Koch, CEO of Metro Group, said, "We are convinced that both of our companies will benefit from the upcoming [cooperation] and the combination of expertise.
"We want to use the strengths of both organisations to capture maximum synergies towards our common suppliers and generate cost savings, which we can then pass on to our customers." Vianney Mulliez, chairman of the board of directors at Auchan, added, "This strategic buying partnership allows us to face the challenges of trade globalisation and the changing procurement markets. This agreement between two major actors of the sector is a great opportunity to develop business and to strengthen our relationship with our main suppliers." "Significant efficiency gains" are expected with this strategic purchasing partnership in the mid- to long term, said the retailers. The international cooperation agreement takes effect from November 2014 for negotiations related to next year's purchases.
© 2014 - European Supermarket Magazine
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