A Constantly Evolving Landscape ?
2018 was a very busy year for the French retail sector, with new purchasing alliances being forged just as old ones fell apart; with perhaps the most significant being Amazon’s first foray into the French online market.
The arrival of Amazon in France has certainly set the fox amongst the chickens, spurning the mainstream retailers into new services and greater purchasing alliances. The deal in question is a partnership with supermarket chain Monoprix. Amazon now offers 6000 Monoprix products to its Amazon Prime customers whilst Monoprix’s online customers can now do their shopping through Amazon Prime. Though the service is only available in certain parts of Paris, it still marks a significant turning point. Food has always been a weakness for Amazon, therefore a partnership with a high-quality chain like Monoprix would go a long way to building a solid reputation amongst French consumers.
This, however, was not the only significant partnership of 2018. In April Carrefour (2nd largest retail group) announced a purchasing alliance with Système U (France’s 5th largest group). Together with Cora (already in partnership with Carrefour), they now form France’s largest purchasing conglomerate – 35% of the market. The partnership is set to last 5 years, much longer than most.
Equally, that of Casino and Auchan; the 4th and 6th largest chains in France. Also including the cash & carry chain Metro and Schiever, the purchasing consortium has been named Horizon and constitutes 23% of the market. Horizon will negotiate with approximately 110 large suppliers which represent 70-80% of their total purchases.
Though purchasing alliances are no novelty, they have taken on a greater, more international scale. Carrefour launched a purchasing alliance with Tesco and Monoprix signed a deal with Ocado. The arrival of Amazon on French soil and the expansion of hard-discounters Aldi and Lidl have placed increasing pressure on the mainstream retailers, forcing them to adapt. The French retail market has never been more dynamic.