>> Europe's biggest retailers are set to go shopping together. France's Carrefour and the UK's Tesco have formed a new partnership focused on their relationship with suppliers. Both companies will now joint purchase their own brand products. The alliance comes as supermarkets face increased pressure from competition and seek to protect their margins.
Reuters' retail reporter, James Davey.>> By bringing together their buying power, they're able to extract a much better deal from these big global suppliers. So we're really talking about the Nestle, Dannon, P and G, Unilevers of this world. And they can get big savings. So analysts are already talking about possible savings of 400 million pounds.
And if you look at the Sainbury's-Asda merger, which is actually constructed as a takeover, effectively Sainbury's versus Asda. That was gonna create savings of 500 million, so they're basically getting these savings without even having to merge.>> Carrefour is Europe's biggest retailer, with annual sales equaling about $102 billion.
Tesco is the UK's biggest supermarket, with sales of about $66 billion. Their deal is the latest partnership in a European retail industry being eyed by Amazon.>> All of the big retailers, all of the big grocers in Europe are under a lot of pressure from both the discounters out in little, and also from looking further ahead, from Amazon in particular.
And what it's enabled them to do is it enables them to become more defensive. They can basically extract these savings, and it puts them in a much better competitive position to be able to offer consumers low prices.>> Financial terms of the new deal haven't been revealed, but if all goes to plan, it will be formally agreed over the next two months.