Sainsbury’s and Asda propose 150 store closures in bid for merger

Sainsbury’s and Asda have offered to sell between 125 and 150 stores if it would pave the way for a merger. The supermarkets said they would also divest a number of convenience stores and petrol stations, to address concerns raised by the Competition and Markets Authority. The watchdog last month identified “extensive competition concerns” in its early findings on the proposed merger. The CMA had calculated 629 areas where competition would be “significantly” reduced from a potential merger, and a further 290 areas where online competition could decrease. Sainsbury’s and Asda have, however, claimed that the CMA’s findings were inaccurate and said they “categorically reject the CMA’s view that coming together will lead to a worse outcome for customers”. Both added that the CMA’s proposed remedies were “impossible to implement”. “The CMA has applied a threshold for identifying local areas of concern that does not fit the facts and is far below the most conservative standards applied in previous cases,” they said in a formal response to the CMA’s provisional report. “This means that the CMA identifies an area of concern where an Asda and a Sainsbury’s store are within seven minutes’ drive time of each other, irrespective of whether there are one or six competitors in the same area. Essentially, a competition test that ignores competition.” They also pledged to deliver £1bn of price cuts within three years of a completed merger deal. The CMA is expected to publish its final report on the merger on 30 April. To send feedback, e-mail pui-guan.man@egi.co.uk or tweet @PuiGuanM or @estatesgazette