Japanese retail giant Seven & I Holdings is to partner with an Osaka supermarket chain in product development and supply chain initiatives.

Its new partner, Mandai Co, has about 150 stores in Osaka and four other prefectures in Kansai and achieved ¥279.3 billion (US$2.2 billion) in sales in the year to February.

While the initial partnership is a working relationship, the Japan Times reports Seven & I, which owns the 7-Eleven convenience store network and Ito-Yokado supermarket chain, may take an equity stake in Mandai.

Commentators say the partnership will give Seven & I local product and sourcing knowledge, improving its Ito-Yokado offer in Kansai region. Especially beneficial will be food product development and know-how.

Seven & I, will dominant in Japan’s retail industry, wants to improve the localisation of its offer, reflecting regional characteristics in its food range in particular.

For Mandai, the partnership could have benefits in its buying power with suppliers and reduce product development costs.