Tesco and Carrefour have said they expect their buying alliance to become operational in October as the pair pursue better terms with suppliers in a bid to drive down prices.
The retailers plan to buy branded and own-brand products together, as well as other supplies such as trollies and shop fittings, as they look to face down rising competition in the grocery sector.
Adding to the pressure created by Amazon’s advance and the Aldi and Lidl’s growing market share, Sainsbury’s and Asda are now poised for a £15 billion merger that would displace Tesco as the UK’s largest grocery retailer.
Tesco has already taken steps to strengthen its supply chain through a £3.7bn takeover of wholesaler Booker and there are reports it is planning to launch a budget supermarket chain called Jack’s.
According to The Telegraph it is planning to open between 30 and 60 discount stores by as early as September this year.
The Tesco-Carrefour deal aims to cut the price of everyday items by 10 per cent, the newspaper reported.
It follows a similar collaboration between French chains Casino, Auchan and Schiever, and Germany’s Metro.