Sainsbury’s store troubles

SAInSBUrY’S suffers from untidy and badly stocked stores and must rediscover the ‘art of good shopkeeping’ after its merger with Asda collapsed, analysts have warned.

The supermarket is expected to post a further fall in sales when it publishes its full-year results tomorrow, amid fierce competition from rival Tesco and discounters Aldi and Lidl.

Clive Black of Shore Capital said the firm had reacted badly when the £12bn Asda tie-up was stopped by the Competition and Markets Authority (CMA). He said the grocer showed ‘little grace’ after its merger plans were defeated when it said the CMA had deprived the British of £1bn of price cuts over the next three years, ‘as if its venture was a charitable exercise’.

Black said Sainsbury’s has ‘inferior store standards – variable availability, untidiness and patchy check-out experiences’.

He added: ‘Sainsbury’s needs to find the art of good shopkeeping.’

Following the failed merger, pressure is mounting on chief executive Mike Coupe.

Critics suggested his job is ‘very vulnerable’, but Sainsbury’s has insisted he has the backing of chairman and board.

A predicted £50m bill associated with the deal is likely to include fees paid to law firm Linklaters for a report published by Sainsbury’s last month in response to the regulator’s provisional findings. Black said: ‘We remain somewhat stunned that the boards of Asda and Sainsbury’s felt it was a good idea to sanction a 168-page report to tell the CMA that it did not know how to do its job. The lawyers involved must have felt Santa was back in town.’