Top US grocery wholesaler Fleming has struck a $4.5bn deal to supply food to every Kmart store in the US. The strategic alliance will combine the buying power of the two companies to give the pair added leverage with suppliers. Fleming ceo Mark Hansen said: "An important aspect to this partnership is that we will be consolidating our purchasing power and speaking with one voice to the vendor community. "In doing so, we are helping vendors optimise manufacturing and transportation while helping ourselves to improve turns and reduce working capital." The companies claim that combined savings produced by the alliance will exceed $400m by the third year. Fleming plans to add three new distribution centres to the 22 it already operates to enable it to handle the extra Kmart volume and to service all Kmart's locations. Products covered by the agreement include grocery, meat, produce, frozen foods and dairy. The alliance may be increased later to cover health and beauty. Kmart's stores will also stock Fleming's BestYet own label range. Fleming has focused more on food wholesaling than food retailing in recent years, investing heavily in a hi-tech centralised procurement system and scaling down its retail operations. After a dismal start to the year, Kmart stock has been steadily recovering from December lows of $4.75 back up to around $9 after its third consecutive month of like for like sales growth. A team based at Kmart's offices in Troy, Michigan, will be tasked with identifying further synergies that could be extracted from the partnership, including an electronic payments process, a petrol supply deal, and savings on the procurement of items not for resale such as office equipment and utilities. {{NEWS }}