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What is a Buying Group?
A buying group is an organisation which combines the volumes of several members in order to obtain goods or services at a rate which is better than might be achieved through individual negotiation.
In addition to better buy-in prices, buying groups may seek to secure a range of other benefits for members including special promotions, rebates and own brand ranges. In the grocery industry, the latter two activities often form the bulk of group activity.
Buying groups may therefore be distinguished from co-operatives or “symbol” organisations which may offer buying as part of a suite of services for members but which usually impose much more rigid relationships, with individual members being linked at a deeper level. The organisations often incorporate mechanisms intended to reduce competition between members, e.g. by requiring that members operate in tightly-defined individual territories.
Buying relationships between retailers may be so informal that they do not even have the status of an organised group.
The official launch of Coopernic in February 2006- an alliance regrouping several heavyweights of the European retail scene – has heralded a period of renewed focus on international grocery buying groups. This is unsurprising, since buying groups are now, potentially at least, amongst the most powerful participants in the European grocery market.
Who are the Main Groups?
The key grocery buying groups currently active in Europe, and their membership rosters are as follows (this list is believed to be complete at the time of writing, but note that memberships change from time to time):
| Group |
Members |
| Alidis |
Intermarché (France), Eroski (Spain). Edeka (Germany) |
| AMS |
Ahold (Netherlands), Caprabo (Spain), Dansk Supermarked (Denmark), ICA (Norway, Sweden plus Baltic states through alliance with Kesko), Jeronimo Martins (Portugal), Kesko (Finland, plus Baltic states through alliance with ICA), Morrisons (UK), Superquinn (Eire) |
| BIGS (Buying International Group SPAR) |
SPAR franchise holders in the following countries: Austria, Belgium, Czech Republic, Denmark, Eire, Finland, Greece, Hungary, Italy, Netherlands, Slovenia, Switzerland, UK |
| Bloc |
Cactus (Luxembourg), Cora Louis Delhaize (Belgium), Delberghe (Belgium), Deli XL (Belgium), Distri-Group 21 (Belgium), Francap (France), Frost Invest (Belgium), Hanos Nederland (Netherlands), HMIJ EUG (Belgium), Huyghebaert (Belgium), HorecaTotaal (Belgium), Lambrechts (Belgium), La Provencale (Luxembourg), LDIP (Belgium), Maximo (France), Theunissen (Belgium), VAC (Belgium) |
| CBA |
Miscellaneous independent retail and wholesale grocery businesses in Bosnia / Herzegovina, Bulgaria, Croatia, Hungary, Latvia, Lithuania, Montenegro, Poland, Romania, Serbia, Slovakia, Slovenia |
| Coopernic |
Colruyt (Belgium), Conad (Italy), Co-op Schweiz (Switzerland), Leclerc (France), Rewe (Germany) |
| Crai |
Miscellaneous independent retail and wholesale grocery businesses in Albania, Italy, Malta, Switzerland |
| EMD |
ABVassilopoulos (Greece), Axfood (Sweden), Delhaize Group Europe (Belgium), Delvita (Czech Republic), ESD Italia (Italy), Euromadi Eberica (Spain), Markant Central European (Czech Republic), Markant Deutchland (Germany), Markant Slovensko (Slovakia), Mega Image (Romania), Musgrave Group (Eire), Nisa-Today's (UK), Super Gros (Denmark), Superunie (Netherlands), Systeme U (France), Tuko Logistics (Finland), ZEV Markant (Austria) |
Source: IGD Research
Negotiating Power
The simplest - and, perhaps, the only - means of gauging the potential negotiating power of any buying group is to aggregate the turnover of its members, as shown below.
Top 10 Leading Grocery Buyers in Europe
Source: IGD Research
It should be noted that buying groups rarely purchase the full range of goods sold by their members. Rather, they tend to aggregate demand, and therefore buying power, for a limited range and - paradoxically - this may give the group disproportionately more buying power than turnover alone would suggest, since this power is focused on fewer lines.
By combining the demand of multiple businesses, grocery buying groups have achieved such scale that they are now, in theory at least, amongst the biggest grocery buyers in Europe. In practice, however, such alliances bring a range of new strategic issues, in particular, maintaining group cohesion and delivering on agreed activities. The latter is key to securing concessions from suppliers.
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