Major shake-up in UK grocery retailing as Sainsbury's and Asda plot 'epic' merger Shock move would create the UK's largest supermarket chain with a 31% market share.
By Associated Press
April 28, 2018
UK supermarket chain Sainsbury's has confirmed it is in advanced discussions about a £10 billion merger with competitor Asda.
The combination would create Britain's largest supermarket chain, with a joint market share of 31% and 2,800 stores, moving the merged company ahead of market leader Tesco. J Sainsbury plc, the chain's corporate name, released no other information on Saturday and said it would make an announcement before the London stock market opens on Monday.
The move underscores the intense competition in Britain's grocery market as discounters like Asda take market share from traditional chains such as Sainsbury's and Tesco.
Kantar Worldpanel, a retail research firm, puts Tesco's market share at 27.6 percent, followed by Sainsbury's at 15.8 percent and Asda at 15.6 percent.
Asda, which is owned by the world's largest retailer, Walmart, has been in a bitter battle for customers with the fast-growing German discounters Aldi and Lidl .
Richard Lim, from economics research consultancy Retail Economics, told the BBC the merger would be a "game changer in the UK grocery market of epic proportions".
The proposed deal could run into problems vis-a-vis UK competition rules and the Lib Dem leader and former business secretary Vince Cable called for an immediate investigation by the Competition and Markets
Authority.
He warned that the potential merger threatened "the creation of even more concentrated local monopolies".
Sainsbury's however could feel emboldened that the consolidation of the two major supermarkets will be approved given the precedent of the Tesco merger with Booker - the UK's largest food wholesaler - that was waved through by the Competition and Markets Authority in 2017.
The merger was first reported Saturday by Sky News.
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