By George Anderson
Reuters has reported Grupo Gigante, Organizacion Soriana and Comercial Mexicana announced they have formed an alliance to give them greater bargaining power with suppliers and make them more competitive with Wal-Mart de Mexico.
The three supermarket chains released a statement claiming the deal "will permit them to seek alliances with suppliers, better operations, economies of scale, improved technology and logistics, to achieve more competitiveness, which will enhance the growth of each company while maintaining full independence among them."
Some see the agreement as the first step in an inevitable consolidation process within the Mexican retail market. Joaquin Lopez of Deutsche-IXE told Reuters, "These companies have had the opportunity to do something together for a very long time. This is a good signal."
What is your reaction to the buying alliance agreed to by Grupo Gigante, Organizacion Soriana and Comercial Mexicana?
There’s certainly nothing wrong with being more price competitive. If the Mexicans can learn anything from the US market, however, it should be that price is not a sustainable strategy against the world’s largest retailer.
All the answers the three chains need can be learned by listening to customers and cooperating with suppliers. [George Anderson - Moderator]