THE RETAIL BULLETIN - The home of retail news
Department Stores
Food & Drink
General Merchandise
Health & Beauty
Home & DIY
Shopping Centres & Retail Parks
Sports & Leisure
• Omnichannel Futures Conference 2020
• Future of Retail Marketing 2020
• The HR Summit 2020
• AI in Retail Conference 2019
CMA flags concerns over Sainsbury’s and Asda merger

The Competition and Markets Authority’s inquiry group that is examining the proposed merger between Sainsbury’s and Asda has said that its provisional findings have led it… View Article


CMA flags concerns over Sainsbury’s and Asda merger

The Competition and Markets Authority’s inquiry group that is examining the proposed merger between Sainsbury’s and Asda has said that its provisional findings have led it to believe that the deal could lead to an increase in prices, a poorer shopping experience and a reduction in the range and quality of products offered.

Following the Phase 2 Investigation, the CMA is also concerned that the cost of fuel could rise at more than 100 locations where Sainsbury’s and Asda petrol stations overlap.

In a statement, Stuart McIntosh, chair of the independent inquiry group, said: “These are two of the biggest supermarkets in the UK, with millions of people purchasing their products and services every day. We have provisionally found that, should the two merge, shoppers could face higher prices, reduced quality and choice, and a poorer overall shopping experience across the UK. We also have concerns that prices could rise at a large number of their petrol stations.

“These are our provisional findings, however, and the companies and others now have the opportunity to respond to the analysis we’ve set out today. It’s our responsibility to carry out a thorough assessment of the deal to make sure that the sector remains competitive and shoppers don’t lose out.”

The CMA has set out potential options for addressing its provisional concerns. These include blocking the deal or requiring the supermarkets to sell off a significant number of stores and other assets, potentially including one of the Sainsbury’s or Asda brands.

The organisation said: “The CMA’s current view is that it is likely to be difficult for the companies to address the concerns it has identified.

“The CMA now welcomes responses from interested parties to its provisional findings by 13 March 2019 and its notice of possible remedies by 6 March 2019.”

Sainsbury’s announced in April last year that it had agreed terms with Asda owner Walmart for the potential merger. The supermarket said at the time that both brands would be maintained that it did not plan to close any Sainsbury’s or Asda stores.

Commenting on the CMA’s provisional findings, a spokesperson for Sainsbury’s and Asda said: “These findings fundamentally misunderstand how people shop in the UK today and the intensity of competition in the grocery market. The CMA has moved the goalposts and its analysis is inconsistent with comparable cases.

“Combining Sainsbury’s and Asda would create significant cost savings, which would allow us to lower prices. Despite the savings being independently reviewed by two separate industry specialists, the CMA has chosen to discount them as benefits.

“We are surprised that the CMA would choose to reject the opportunity to put money directly into customers’ pockets, particularly at this time of economic uncertainty.

“We will be working to understand the rationale behind these findings and will continue to press our case in the coming weeks.”


Email this article to a friend

You need to be logged in to use this feature.

Please log in here

Subscribe For Retail News


Omnichannel Futures Conference 2020
Omnichannel Futures Conference 2020
5 February 2020
Cavendish Conference Centre, 22 Duchess Mews, London WG1 9DT
A truly omnichannel offering requires an understanding of customer behaviour across all shopping channels and how this should impact your overall business strategy
Future of Retail Marketing 2020
Future of Retail Marketing 2020
9 June 2020
Hallam Conference Centre, 44 Hallam St, London W1W 6JJ
The Future of Retail Marketing for Customer Engagement
The HR Summit 2020
The HR Summit 2020
1 October 2020
Hallam Conference Centre, London W1W 6JJ
Company values, collaboration with employees and driving a major HR transformation to create a truly omnichannel experience, need to be at the heart of the organisation's culture and brand
AI in Retail Conference 2019
AI in Retail Conference 2019
14 October 2020
Hallam Conference Center, 44 Hallam Street, London W1W 6JJ