Amazon wins grocery foothold in France through Monoprix deal

Amazon’s deal in France follows its acquisition of Whole Foods Market in the US

Amazon pushes further into the food business in Europe and as price competition among France's major supermarkets heats up (REUTERS)

Amazon is taking aim at France, securing a delivery deal in Paris with Casino Guichard Perrachon that shakes up one of Europe’s most competitive grocery markets.

Items from Casino’s Monoprix stores will be sold via the Amazon Prime Now app in the French capital and the surrounding region, the companies said late Monday. The move comes as Amazon pushes further into the food business in Europe and as price competition among Casino, Carrefour and family-owned Leclerc heats up in France.

Casino shares rose as much as 9.7 per cent early Tuesday in Paris, though the company has lost about one-fifth of its value this year.

Amazon’s deal in France follows its acquisition of Whole Foods Market in the US and partnerships with other European grocers such as Morrisons in the UK as the e-commerce giant makes inroads beyond selling books and appliances into the trickier business of delivering food to consumers’ homes.

Price competition has intensified in France amid a stagnant economy and consolidation of the supermarket industry in recent years. While the country’s grocers have lagged behind in home delivery, their so-called “drive” services -- allowing shoppers to pick up orders from stores and other locations -- have thrived.

Sarenza, Ocado

Casino has been building up its online operations by entering exclusive talks to buy shoe retailer Sarenza in February after striking a deal with Ocado in November under which it will license the UK online grocer’s order fulfilment technology. Carrefour has been moving to counter Amazon by expanding its sales of own-branded products and organic groceries under new chief executive Alexandre Bompard.

Leclerc, known for its giant out-of-town hypermarkets, recently said it was moving back to Paris through a network of shops, in a bid to grab a share of an urban market that offers higher margins than in the rest of the country.

Casino’s deal with Amazon is a “very defensive move,” aimed at protecting Monoprix from Leclerc, Fabienne Caron, an analyst at Kepler Cheuvreux, said in a note to clients. The deal will enable Casino to buy time until the Ocado partnership is up and running, the analyst said.

Bloomberg