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Tesco and Carrefour says 'strategic alliance' will cut prices | |
(35 minutes later) | |
Tesco has said it is planning a "long-term, strategic alliance" with French retail giant Carrefour, as the two try to cut costs in the face of increasing competition. | |
The two groups are aiming to use their joint buying power to offer better prices to customers. | |
The companies said the alliance would also improve the quality and choice of goods available. | |
Tesco is the UK's largest retailer while Carrefour is Europe's largest. | |
Last year, Tesco - which employs 440,000 people - reported profits of £1.3bn with sales of £57.5bn. | |
Carrefour operates 12,300 stores across more than 30 countries, employing about 375,000 people worldwide. Last year, it had sales of €88.2bn (£78bn). | |
The two have been talking for two years and, although no formal agreement has yet been signed, they said they were hoping to confirm a deal in the next two months. | |
Tesco chief executive Dave Lewis said: "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." | Tesco chief executive Dave Lewis said: "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." |
The grocery sector in the UK is currently going through a period of rapid change. Tesco itself recently completed the purchase of wholesaler Booker, and in April, Sainsbury's said that it was in advanced talks to buy Asda. | The grocery sector in the UK is currently going through a period of rapid change. Tesco itself recently completed the purchase of wholesaler Booker, and in April, Sainsbury's said that it was in advanced talks to buy Asda. |
The traditional big four UK supermarket chains - Tesco, Sainsbury's, Asda and Morrisons - have faced increasing competition from the rapidly-expanding budget chains Lidl and Aldi over the past few years, and there is now the added threat of internet giant Amazon moving into the sector. | The traditional big four UK supermarket chains - Tesco, Sainsbury's, Asda and Morrisons - have faced increasing competition from the rapidly-expanding budget chains Lidl and Aldi over the past few years, and there is now the added threat of internet giant Amazon moving into the sector. |