Proposed merger seen as an attempt to insulate against Amazon’s move into sector
The rapid expansion of discounters Aldi and Lidl – whose share of the grocery market has rocketed from less than 4% a decade ago to nearly 13% today – has hit all traditional supermarkets. But the industry’s biggest fear is Amazon.
Sainsbury’s boss Mike Coupe has long made clear that his real concern is the online giant, which is now the world’s second biggest company, valued at $740bn compared with Walmart’s $264bn. Coupe admitted that his 2016 acquisition of catalogue store Argos was intended partly as a way to fight off the increasing threat from Amazon.
1) Tesco
Continue reading...From fears about job losses to a view of two businesses trying to ‘future-proof themselves’
Rebecca Long-Bailey, Labour’s shadow business secretary:
A Tesco/Sainsbury’s-Asda duopoly [would have] unrivalled power to dominate, dictating choice and prices for consumers … [It also] poses immense risk to suppliers, with unprecedented bargaining power to drive suppliers’ prices and payment terms down.”
Hundreds of thousands of workers stand to be affected and all know such announcements tend to be followed by management speak like ‘rationalisation’ in the name of ‘efficiency’. What that usually means is job losses or cuts to pay, terms and conditions.”
[These are] two businesses trying to get ahead of the curve and future-proof themselves in a very challenging market.”
Ultimately there has to be job losses and the suppliers will have to pay through lower prices for the larger volumes they may see. Customers will see reduced choice and the current price war is likely to persist.”
Increased competition from Aldi and Lidl is the main motivation behind the proposed deal. The deep-discounters have disrupted the UK supermarket sector severely.”
Those at the top of Sainsbury’s and Asda should give reassurance that cost savings won’t be achieved simply by milking their small suppliers for all they’re worth.”
Continue reading...Deal immediately triggered fears of thousands of job losses after its announcement on Saturday
Sainsbury’s and Asda will on Monday reveal the details of a £15bn merger that would create a new grocery superpower, against a backdrop of mounting concerns about the impact on shoppers and workers.
The shock deal, revealed on Saturday, immediately triggered fears of thousands of job losses – the group, with a combined workforce of 360,000 people, would leapfrog Tesco to become the UK’s biggest private sector employer. The new grocer would ring up nearly £1 in every £3 spent on groceries on the UK high street.
Related: Sainsbury's and Asda play seismic supermarket sweep | Zoe Wood
Continue reading...Retail experts predict ‘Herculean task’ will prompt colossal change if blockbuster deal goes ahead
Retro 90s fashion is a huge trend on the high street at the moment but that nostalgia has now spilled over into food retail as the supermarket giant Sainsbury’s attempts a blockbuster deal that will result in it seizing back the UK grocery crown it surrendered to Tesco in 1995.
The UK’s second-largest retailer has confirmed plans to merge with its nearest rival Asda in a £15bn deal that will create a mega grocer with more than £50bn sales and 2,800 stores. The details of the merger will be spelled out in a stock exchange announcement on Monday morning but analysts have already spent the weekend crunching the numbers after the news leaked out on a grey Saturday afternoon.
Related: Sainsbury's and Asda in shock talks over £10bn merger deal
Continue reading...New supermarket giant would have 31.4% market share, compared with Tesco’s 27.6%
Sainsbury’s and Asda are in talks over a £10bn merger that would send shockwaves through the high street by creating a retailer more powerful than the current market leader Tesco.
A tie-up between the UK’s second and third largest supermarket chains would create a new group with huge shares of the market in food, clothing, household goods and toy retailing.
Related: Competition regulator likely to choke on Sainsbury's-Asda deal
Continue reading...US firm Comcast’s rival bid is expected to spark a complex game of cat and mouse
Comcast is attempting to outfox Rupert Murdoch’s attempt to take over Sky, by lodging its own bid for the pay-TV group. Meanwhile, Disney is waiting in the wings with a $66bn (£47bn) bid for Murdoch’s 21st Century Fox entertainment business, which includes a 39% stake in Sky. This complex game of cat and mouse involving three global media heavyweights is set to play out over the summer.
Continue reading...Late winter weather deepens DIY chain’s woes with furniture and plant sales hammered
Sales at Homebase plummeted 20% in March as the “beast from the east” added to the woes of the Australian-owned DIY chain.
Perth-based Wesfarmers said the cold snap had played havoc with demand for plants and garden furniture, resulting in a fresh setback for the struggling chain.
Related: UK retail sales continue to disappoint in April
Continue reading...Regulator says merger needs further scrutiny saying deal could spark higher energy bills
The npower-SSE merger could lead to higher consumer energy bills and warrants further scrutiny, the competition watchdog has said.
Sources at the firms, two of the big six energy suppliers, had expected the merger to get the go-ahead by the Competition and Markets Authority.
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