BERLIN — Germany’s Metro Group and France’s Groupe Auchan are joining forces to leverage bargaining power with branded global consumer product brands as well as private-label manufacturers.
Starting Nov. 1, Metro’s wholesale and food retail divisions and the French hypermarket and supermarket retailer are entering into a two-part international purchasing partnership.
The first calls for joint negotiations on specific international services and conditions with leading multi-national suppliers of branded non-food consumer products, excluding electronics.
This international cooperation agreement is to involve Metro’s core self-service wholesale Cash & Carry, Real supermarket and Galeria Kaufhof department store divisions.
A Metro spokeswoman said the agreement pertains to “large suppliers active on a global level along the lines of Procter & Gamble and Unilever” in the cosmetics sector, or global apparel brands. While she didn’t name apparel brands, Metro’s current catalogues for its core Cash & Carry division includes such brands as Champion, Kappa, Reebok, Puma, Emu, and Timberland.
Galeria Kaufhof’s portfolio encompasses a wide range of known international brands, such as Betty Barclay, Burlington, Calvin Klein, Camel Active, Esprit, Gerry Weber, Hugo Boss, Jack & Jones and Levi’s.
The second part of the agreement involves international sourcing of non-branded, non-food goods, primarily in apparel. The goods are to be sold by each party under no-name or own-brand labels. Those products are to be sourced predominantly through centralized purchasing entities based in Hong Kong and Shanghai from large Asian or Eastern European suppliers, Metro said. The no-name and private label goods will be offered in Metro’s Cash & Carry and Real assortments.
Metro Group’s chief executive Olaf Koch noted, “We want to use the strengths of both organizations to capture maximum synergies towards our common suppliers and generate cost savings, which we can then pass on to our customers.”
The two companies said they expect significant mid-to-long term efficiency gains.
Although operating different business models, Metro and Auchan have done business together before. In 2012, Auchan bought the Eastern European business of Metro’s Real supermarket division.
Metro operates about 2,200 stores in 31 countries, and in fiscal 2013/14 generated sales of 63 billion euros, or $85.52 billion, according to preliminary figures.
Dollar figures are converted at average exchange for the period to which they refer.
Groupe Auchan is the world’s 11th largest food retailer, and operates in 16 countries. In 2013, its consolidated sales reached 48.1 billion euros, or $63.9 billion.