Tesco calls an end to buying partnership with French giant Carrefour

Supermarket giant Tesco is to call an end to its buying partnership with French peer Carrefour after three years.

Britain’s biggest retailer told investors that it will end the alliance – which was intended to improve product choice and lower prices – on December 31.

The two retail heavyweights pledged to continue their efforts to improve purchasing deals “independently” and will focus on their own opportunities.

In 2018, the pair agreed the tie-up in order to strengthen relationships with grocery suppliers, reduce prices through their greater collective buying power and expand their own-label ranges.

Tesco, Britain’s biggest retailer, plans to end the alliance on December 31. Picture: Andrew Milligan/PA Wire

In a statement, the two firms told investors: “Over the last three years, Tesco and Carrefour have benefited from a number of joint buying opportunities across food and general merchandise categories, enabling access to new suppliers, new sources and new products.

“Moving forward, both companies have agreed that they will continue this work independently and focus on their own opportunities, building on the experience and the progress made during the alliance period.”

Shore Capital analyst Clive Black noted: “For whatever reason, regulatory, cultural and operational, there would appear to be little notable benefit from the alliance on an ongoing basis.

“Such a view does not come as a great surprise to us, having observed many attempts by major grocery chains to explore economies of scale through amalgamated buying.

“In truth, the outcome is far from clear or impressive for major players; apart from bananas, it was not especially evident in food for Asda in the UK being part of Walmart, never mind other buying groups.”

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