Europe’s largest buying alliance, EMD, has announced that Germany-based Globus will incorporate the total volume for the eastern European locations in Russia and Czech Republic into the EMD agreements. EMD also said that purchase and marketing volumes in Globus’s Germany-based hypermarkets will also be integrated into EMD agreements.
Incorporation grows EMD’s reach
The addition of Globus to the buying alliance will see EMD extend its lead as the region’s largest retailer group, while it will also mark EMD’s first expansion into Russia, a market with strong long term potential. From 2017 EMD has said that the total procurement volume for branded products in Russia, where it operates 11 stores, and the Czech Republic (15 stores) will be transferred to EMD.
Commenting on the company’s decision to join EMD, Globus’s board member for purchasing, Armin Gärtner, said: “The decision to integrate in EMD our purchasing and marketing volumes for Globus, enhances additionaly our already strong market presence. This close connection with EMD also in German market will be profitable for our partners in branded product manufacturing as well.”
Globus’s incorporation marks the end of a busy year for EMD
Although Globus will only be included in purchasing agreements from 1 January 2017, the announcement of its incorporation should mark the end of what has been a very busy 2016 for the alliance. At the beginning of 2016 EMD announced the incorporation of UK-based ASDA and then Kaufland’s decision to ‘concentrate in EMD parts of its purchasing activities for its Eastern European’ operations in Bulgaria, Croatia, the Czech Republic, Poland, Romania and Slovakia.
The announcement also marks a busy year for buying alliances more widely. At a European level Ahold Delhaize chose to remain a member of both AMS and Coopernic, while at national levels there have been several alliances built between retailers in Italy, Portugal and Spain. The various moves highlight how with consumption growth in Europe expected to remain meagre in the short to medium term and competition high, retailers are having to find new ways to maintain margins. In 2017 it is likely that further developments are likely to occur in relation to buying alliances, so it will be key for suppliers to remain alert to changes in groups’ memberships.
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