NEWS ShopTalk T
he Competition and Markets Authority (CMA) has launched a formal investigation
into whether the proposed £12bn merger between Sainsbury’s and Asda could hurt consumers and the small businesses that supply the supermarkets.
supermarkets could lose out as a result of this deal.” The merger would create a company with a grocery market share of 31.4%, according to data analysis firm Kantar Worldpanel.
Some industry insiders have raised concerns about the emergence of a “duopoly” because the enlarged Sainsbury’s and Tesco would control nearly 60% of the UK grocery retail market.
It is expected that scores of stores will have to be offloaded as part of the competition review.
The competition watchdog said it would look at how the deal could drive up prices and affect quality in the groceries market as well as in the areas of fuel, electricals, children’s toys and clothing.
It will also look at whether the enlarged company could use its increased buying power to squeeze suppliers and the potential knock-on effects for shoppers.
The business minister, Greg Clark, wrote to the CMA this year, asking it to consider the “possible impact on the supply chain”.
Sainsbury’s and Asda have previously said suppliers will have to bear the brunt of a pledge to reduce the price of everyday products after their merger, which was announced in April.
Andrea Coscelli, the chief executive of the CMA, said: “About £190bn is spent each year on food and groceries in the UK, so it’s vital to find out if the millions of people who shop in
6 October 2018 T Lidl.
Mainstream supermarkets have been searching for a way to get into the fast-growing discount market, having seen Aldi and Lidl steal their shoppers since the recession, when rising food prices encouraged Britons to shop around for groceries. The German chains control more than 13% of the UK grocery market, according to Kantar Worldpanel data, compared with less than 9% four years ago.
esco is launching Jack’s, a new discount chain set to rival German discounters Aldi and
the low price ‘farm’ brands to take on the discounters. The brands, with fictitious names like Redmere, Woodside and Willow, are expected to be sold in Jack’s.
There is also a new Jack’s branded grocery range.
Tesco has 2,659 stores in the UK, a sprawling estate that includes 172 Metros. It is thought that Tesco Metros in St Helens and Edge Hill, Liverpool are among those destined to be converted to the Jack’s brand.
T
he revival of Morrisons has continued as the supermarket’s sales soared in the first half of the year, but profits slid almost a third to £142m.
Like-for-like sales, excluding fuel and VAT, rose 4.9% for the six months to 4 August - better than the 3% increase for the same period last year.
Second quarter sales were up 6.3% - its best result for almost a decade. Chief executive David Potts said Morrisons continued to become broader, stronger and more popular.
The retailer said it had extended its ‘Fresh Look’ programme to more than half its 500 stores, with significant improvements in product range and customer service, and developed its offers for online, wholesale, local and in-store services.
Since taking the helm, chief executive David Lewis has launched
Sales have now risen for the past 11 consecutive quarters and its online delivery service is available to more than three quarters of UK homes, including more parts of southern England and Scotland for the first time.
S
ales at McColl’s have fallen as the convenience retailer continued to suffer from the collapse of wholesaler Palmer & Harvey. Despite enjoying a boost from the hot weather, like-for-like sales excluding new store openings dropped 0.9% during the third quarter.
Chief executive Jonathan Miller said a move to replace the P&H contract using a supply deal with Morrisons had been completed ahead of schedule.
It means 1,300 stores will now have exclusive access to around 400 Safeway products, including the 700 stores previously supplied by P&H. McColl’s has 1,600-strong UK store estate.
F
armfoods has increased its profit by 18% spite of a fall in sales. Annual accounts lodged at Companies House show that pre-tax profit was £11.1m over the 12 months to the end of last December, up from £9.2m the year before. Turnover at the frozen food supermarket group fell by 3.9 per cent to £642.7m. The company began as a butcher’s shop and meat distributor in Aberdeen during the 1950s. It now has its headquarters in Cumbernauld, North Lanarkshire, employs close to 4,000 staff and runs more than 300 shops throughout the UK.
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