“£1bn in price cuts if we merge,” promise Sainsbury’s and Asda

December 3, 2019

Sainsbury‘s and Asda are fighting an ongoing battle to convince the Competition and Markets Authority (CMA) to allow them to merge, a move that would see them overtake Tesco to become the UK‘s biggest chain.

The duo claim their planned merger will save them £1.6bn and allow them to pass on £1bn in price cuts to consumers.  What's more, they have stated that they will invite an independent body to check this promise in public.

 

The CMA has currently chosen to block the merger, saying such a move would result in higher prices and less choice for UK consumers.

 

Sainsbury‘s and Asda‘s joint statement last week said the CMA‘s provisional findings contained “significant errors”.

 

In a robust statement, it criticised the CMA‘s threshold at which concerns were triggered. It said this was set at an “unprecedentedly low level”, which, therefore, generated an unreasonably high number of areas of concern.

 

"The failure of getting that deal through – which still surprised a lot of the grocery market - has meant they have had to start on a new track for their future and review their strategic way forward," said Catherine Shuttleworth of Savvy Shopper.

 

"I think that means that Mike and the senior team have had to get their heads down and focus on the business and look at what they can do in a world where margin is reduced in the supermarket business."

 

The CMA‘s final decision is due on 30 April next year.

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