Watchdog to weigh up the Lidl factor in Sainsbury’s Asda merger
THE competition watchdog will take into account the rapid growth of Aldi and Lidl when deciding whether to approve the £12bn mega-merger between Sainsbury’s and Asda.
It was feared last month that Aldi and Lidl would not be considered in the Competition and Market Authority’s (CMA) investigation into the deal, after an initial analysis excluded the discounter chains, as well as convenience stores.
Sainsbury’s has 14 stores in Northern Ireland while Asda has 17 — but is planning to open its 18th at the former Nortel site in Mallusk.
And while Aldi is yet to open in Northern Ireland, Lidl is an established operator here, with 38 outlets.
But in its latest update, the CMA said it has broadened its scope to include the German discounters as well as non-grocery competitors such as B&M, Amazon, and John Lewis & Partners.
The CMA will now assess which other businesses can be considered competitors to Sainsbury’s and Asda.
Provisional findings will be presented early next year, while a final decision must be made by March 5, 2019. Stuart McIntosh, chairman of the CMA’s inquiry group, said: “Millions of people shop at Asda and Sainsbury’s every week, so it is essential we carry out a thorough investigation into their proposed merger.
“Our job is to find out whether the merger will result in people paying more or being faced with less choice or a poorer quality shopping experience.”
In their own submission to the CMA, Sainsbury’s and Asda said that Aldi and Lidl “have had the most profound impact” on the grocery market over the past decade. The duo also pointed to the launch of Jack’s, Tesco’s new convenience store outlet.
“Their rapid expansion, both in store numbers and product range and quality, have changed customer perceptions of ‘value’ and ‘convenience’ and they are now mainstream grocery competitors, with over 20% volume share of fresh food,” they said.