Sainsbury’s and Asda have agreed terms for a proposed merger, which is likely to be investigated by the Competition and Markets Authority.
The combined group of the UK’s second and third largest supermarkets would total 2,800 stores and would represent 31.4% of the UK grocery market.
Mike Coupe, Sainsbury’s chief executive said: "This is a transformational opportunity to create a new force in UK retail, which will be more competitive and give customers more of what they want now and in the future.
"It will create a business that is more dynamic, more adaptable, more resilient and an even bigger contributor to the UK economy."
ACS chief executive James Lowman said: “Convenience retailers will be thinking about the knock-on effect of a Sainsbury’s/ASDA merger on their businesses and on this sector. What will be the strategy for the Sainsbury’s Local convenience stores, and will the combined business look to engage with independents through a wholesale or franchise model – something Sainsbury’s has looked at in recent months? What will happen to buying power in the grocery market, and how will this impact on suppliers and on smaller retailers and wholesalers? What will be the implications for the fuel retailing market from these two large fuel retailers coming together?
“The Competition and Markets Authority will look at this merger and needs to consider these questions as part of that inquiry. Consumers win when there is vibrant competition and choice, and people increasingly fulfil their shopping needs through a variety of large and small stores, on line shopping and eating out of the home. The CMA needs to think carefully about these changing shopping behaviours and consider the full implications of this deal.”
ACS will assist the CMA investigation by providing information and analysis on the convenience and grocery market.
