ZEENAT MOORAD: Sainsbury’s and Asda walk down the aisle
Sainsbury’s and Asda merger is a spectacular and game-changing creation of a duopoly in the UK grocery market
The UK grocery market is notoriously cut-throat, and the war of the supermarkets took a dramatic turn a week ago when Sainsbury’s announced a £7.3bn takeover of Walmart-owned Asda. This will be a marriage of Britain’s second-and third-largest grocers. Consolidation is to be expected, given that German discounters Aldi and Lidl continue to gain market share and e-commerce giant Amazon (through AmazonFresh and Whole Foods) is digging its heels in. The proposed deal will result in 2,800 stores with sales of £51bn and a workforce of roughly 330,000. Two separate brands will still exist — Asda is more middle ground while Sainsbury’s is slightly upmarket. Whichever way you look at it, the merger is a spectacular and game-changing creation of a duopoly in the UK grocery market. Market-leader Tesco, which has a 27.6% market share, will be dethroned as the new entity becomes the UK’s largest retailer. Sainsbury’s market share stands at close to 16% and Asda’s at 15.5%. A decade ago, the Germ...
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