Asda & Sainsbury’s unveil merger details, trigger fear of job losses
Category: #retail  By Saipriya Iyer  Date: 2018-05-01
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Asda & Sainsbury’s unveil merger details, trigger fear of job losses

Sainsbury's, the second largest supermarket chain in the United Kingdom, has reportedly penned down a merger deal with Asda Stores Ltd., the Leeds headquartered British supermarket retailer. For what seems to a litany of valid reasons, the deal seems to have sent shockwaves throughout the retail industry in the UK.

For the uninitiated, the two supermarket retailers have been in talks for a while now, discussing a plausible merger of sorts. According to the article published by the BBC, if the two collaborate, it would create the nation’s most proactive retail group that would represent more than 31% of the UK grocery market. Presently, the two retailers have brought their talks to fruition, having signed a collaboration agreement worth GBP 15 billion, triggering panic attacks across Britain.

Reportedly, the reason for the current situation of unrest is the huge competition that would emerge in the nation’s retail industry post this merger. Together with Tesco, this combined group may take over almost 60% of the UK grocery retail market. As per experts, this would create a duopoly, leading to considerable disarray and restructuring, that may eventually lead to negative implications for thousands of jobs.

Amidst the furor generated, the Liberal Democrat leader Vince Cable was quoted stating that the merger is likely to generate highly concentrated local monopolies. Apparently, he has also challenged the incoming boss of the CMA (Competition and Markets Authority), Andrew Tyrie to conduct a proper robust investigation.

An industry source reported that Walmart had been attempting to offload Asda for a while now, and its sale to Sainsbury provides testament to its supposed failure to conquer the UK grocery retail market since the last couple of decades. Numerous other industry insiders, it is speculated, are still in a state of shock and denial regarding the merger.

As per reports, the combined retail group will encompass 2,800 stores and may generate annual sales of over GBP 50 billion. Both the retail brands are anticipated to be retained as is, since they both attract a different shopper base.



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Saipriya Iyer

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Saipriya Iyer

Saipriya Iyer develops content for Market Size Forecasters, Algosonline, and myriad other platforms. A computer engineer by profession, she ventured into the field of writing for the love of playing with words. Having had a previous experience of 3 years under her bel...

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