ZEENAT MOORAD: Where to now for Sainsbury’s and Asda?
With their deal torpedoed, where does this leave Sainsbury’s and Asda?
I write here today about an ending. Sainsbury’s and Asda have agreed to cease merger talks. Billed the retail deal of the decade, it would have created the UK’s largest supermarket chain, accounting for £1 in every £3 spent on groceries. But the tie-up was blocked by the Competition & Markets Authority, which said it would lessen competition. The UK’s competition watchdog also said the £7.3bn deal would raise prices for consumers. Whichever way you look at it, the merger would have been a spectacular and game-changing creation of a duopoly in the notoriously cut-throat UK grocery market. It would have put almost three-fifths of Britain’s supermarket industry under the control of two companies. Sainsbury’s and Asda (owned by Walmart) maintain that the tie-up would have cut their costs, allowing them to lower prices for consumers. But they won’t fight the decision. The consolidation was expected: German discounters Aldi and Lidl have continued to gain market share, and e-commerce gian...
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