NEWS

Could ‘Sasda’ deal see more stores close than first thought?

Published on: 3rd May 2018

The merger of Sainsbury’s and Asda has raised the question as to how many stores the Competition and Markets Authority will require the combined group to close.

Following the announcement of the proposed merger, many media reports focused on the assumption that Asda stores are predominantly concentrated in the north of the UK. However, a report by Bloomberg shows that the true picture is far more nuanced, with Asda’s presence in the south far stronger than has been reported. This raises questions over the notion that the current store estates will remain largely unchanged by the deal.

According to the Bloomberg report, in past supermarket deals, the regulator has used driving times, ranging from around 5-15 minutes, to identify areas where merging companies may need to dispose of stores in order to maintain competition in the grocery market.

Bloomberg’s Gadfly subsidiary has assessed the Sainsbury’s and Asda store estates in terms of geographical proximity. Asda has approximately 630 stores in England, Wales and Scotland – of these, there are 526 where the closest Sainsbury is within five miles or less.

While Asda only has larger stores, Sainsbury has several different formats, with more than half being convenience shops. Gadfly’s analysis doesn’t distinguish between these, so it remains unclear how the regulator will account for these variations in judging how many disposals it will require to approve the deal.

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