Blue Square Israel (NYSE: BSI) is in advanced negotiations with French retail chain Casino for a strategic partnership. Blue Square Israel will initially receive a franchise for the private label of Casino’s subsidiary, Leader Price. As part of the agreement, Co-Op Blue Square will import Leader Price products, which include over 2,500 food and non-food products.
All of Blue Square Israel’s private label activity will be included in the Leader Price label. According to the MOU, the franchise also includes the Palestinian Authority, if and when the chain launches operations there.
In future, the strategic cooperation with Casino is also likely to lead to a partnership in the company, once the parent company, the Co-Op Blue Square Consumer Cooperative Society, which holds 80% of Blue Square Israel, completes its ongoing privatization process.
Leader Price is a subsidiary of the Casino chain, considered the second largest chain in France. At the initial stage, cooperation will boost Blue Square Israel’s activity in the private label sector. At a later stage, it is expected to lead to more extensive strategic and logistic cooperation with Casino International. “Globes” has learned that Blue Square Israel is about to utilize its private label franchise to significantly strengthen its activity in this field in the Super Center and Mega branches.
Blue Square Israel has set a target of a 10% market of private label sales, compared with current sales of only 4%. As of now, Blue Square Israel has a private label called Select, which includes canned goods, catsup, and snacks. It has also attempted to introduce products of the US company Topco, under the private label Kingston. After the Leader Price label is introduced, all the existing labels will be eliminated and included under Leader Price.
Published by Israel's Business Arena on January 22, 2001