PARIS: French retailers Carrefour and Fnac Darty announced a purchasing partnership for domestic appliances and consumer electronics in France, as Carrefour undertakes plans to cut costs in order to boost its earnings.

The companies said the agreement would become effective for the 2018 supplier negotiations, and that Carrefour and Fnac Darty would maintain independent commercial policies.

The tie-up between Carrefour and Fnac Darty follows a similar, recent partnership between Casino and Ocado.

Analysts have added that Amazon, whose acquisition of US upmarket food retail chain Whole Foods shook up the global supermarket sector this year, may also eye European alliances.

Carrefour, the world’s largest retailer after Wal-Mart, hired Alexandre Bompard from Fnac Darty - which is France’s largest electronics retailer - in July.

Bompard is expected to back a far-reaching restructuring that some analysts estimate could involve a billion euros ($1.2 billion) of cost cutting. Carrefour - which issued a profit warning in August - is due to unveil a strategy plan on Jan.23. Investors want Bompard to boost the performance of the group’s France-based hypermarkets, a goal that has eluded several predecessors amid competition online and price discounting from rivals such as unlisted Leclerc.

They also want him to catch up in terms of the digitisation of the retail sector.

Earlier this week, Fnac Darty said it was banking on merger synergies and its ability to deliver sales growth above that of its markets in order to nearly double its operating margin mid-term.

Fnac Darty, which is 24 per cent-owned by German peer Ceconomy CECG.DE, said its goal was to create “Europe’s benchmark omnichannel services platform”, at a time when brick and mortar retailers worldwide have been feeling the pressure from Amazon, following Amazon’s Whole Foods takeover. Meanwhile, Eurozone bond yields rose on Monday after the US Senate passed a tax bill over the weekend, increasing the chances of more aggressive interest rate hikes there, while a key meeting of euro zone finance ministers was also in focus.

Reuters