Tesco and Europe's largest retailer Carrefour are announcing their intention to enter into a long-term strategic alliance, which will see prices drop.
The two major retailers are aiming to use their joint buying power to offer lower prices to customers.
The alliance will cover the strategic relationship with global suppliers, the joint purchasing of own brand products and goods not for resale. It will be governed by a three-year operational framework.
Both companies said the alliance will enable an improvement in the the quality and choice of products available to customers, at lower prices.
In a move not to provoke anger from suppliers due to price cuts, the retailers said the alliance will "strengthen" supplier relationship.
In a statement, the two retailers said: "This agreement will also allow both companies to strengthen their relationships with their suppliers and create significant opportunities for those suppliers."
It is anticipated that the alliance will be formally agreed within the next two months.
Dave Lewis, Tesco Group Chief Executive said: “I’m delighted to be entering into a strategic alliance with Carrefour. 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 move could lead to more French products sold in Tesco stores and more British products in Carrefour supermarkets, according to a Tesco spokeswoman.
