Amazon took a significant step in growing their foothold in the grocery market in France by announcing a partnership with Casino Group on Tuesday. The strategic deal will integrate Amazon pickup lockers into Casino owned grocery store locations. This will allow for customers to order products on Amazon and then pickup in the store.
Amazon will also start carrying more of the grocery products carried by Casino and their stable of grocery store chains. The agreement will also allow for Amazon to expand their Prime Now grocery delivery service, which they began with Monoprix (Casino Group’s grocery store chain which is comparable to a French version of Whole Foods) in Paris with great success. The delivery service will expand beyond Paris into surrounding areas in the next twelve months.
The Casino Group is currently in the middle of a cost cutting scenario which has fueled speculation that the chain might be poised for a consolidation with Amazon. These types of business deals could potentially lay the groundwork for that type of scenario to take place. The company is one of the largest retailers in France with grocery stores under the names: Hyper Casino, Casino Supermarche, Leader Price, Vival, Monop, Monoprix, and Spar among others.
The retail grocery business in France is the third largest market in the E.U. behind the United Kingdom and Germany. However, Amazon has a very small share of the overall market in France with some estimates around 17% of the retail grocery channel business.
Amazon has made the strategic business direction of entry into the grocery channel a priority. A recent post on this site detailed the online retail giant’s decision to launch brick and mortar grocery stores besides Whole Foods, to compete with the mainstream retail grocery players in key cities as a test market for the concept.
Amazon could be making a play here for Casino Group to enter the French grocery market more aggressively. That would certainly have an impact on that business and would benefit the consumer with lower costs on many products because the other players would have to compete with Amazon on price.
Amazon is currently the dominant ecommerce player in France and this agreement with Casino Group will strengthen that position for them and allow for some new conveniences in the shopping experience for the French consumer. The Casino Group, in their press release, indicated that the partnership will allow them to reach a wider demographic of customers as well as provide customers with an enhanced service.
This partnership, if proven successful, could be a harbinger of things to come with Amazon potentially looking into similar agreements with major grocery retailers in Germany and the UK in the months ahead.
It will remain to be seen if Amazon does present a formal bid to purchase Casino Group, and how that scenario would be perceived by the French government regulatory personnel and the public at large.
In my view, it could be seen as another disconcerting way that Amazon is growing to have too much control over many areas of industry. It is getting to the point that it could be very problematic for several key areas of industry throughout the world if Amazon failed at some point. That should give society some cause for seeking a pause on some of their growth activity.
They do provide the consumer with a great service, and they are efficient at what they do in the ecommerce area, but they are pushing their influence into everything and that should at least cause us to start to question where this will all eventually lead, and the possible ramifications of a single company growing to that level of influence.
(Some background information and statistical data provided by CNBC, Yahoo! Finance, and Reuters)