Merger goes with the slow

Growth stunted for stores joining forces

SAINSBURY’S and Asda have been revealed as Britain’s slowest growing big supermarkets – the day after they announced a mega merger.

Takings at Sainsbury’s grew just 0.2% in the three months to mid-April, industry experts Kantar Worldpanel said in a report out yesterday. And sales at Asda only rose 1.4%.

The pair also lost market share over the past year. The data emerged a day after the two supermarkets confirmed plans for a £12billion merger.

The proposed deal would see the new combined group overtake industry titan Tesco, with 2,800 stores, 330,000 staff and £51bn of sales.

But Kantar’s research found Sainsbury’s market share was down to 15.9% and Asda at 15.5% – whereas Tesco’s share has remained steady at 27.6%, with its sales up 2.1% in the three months to April 22.

Sales at Morrisons were up 2.2% – and discount grocer Aldi saw takings jump 7.7%, with rival Lidl up 9.1%. Waitrose is also struggling, notching up just 0.2% in sales growth, with its market share falling to 5.1%.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: “A merger between Sainsbury’s and Asda would place nearly a third of market share in their hands.

“But the march of the discounters, and any enforced store closures, could affect this figure. The two supermarkets have different customer bases.

“Asda achieves nearly two-thirds of its sales outside London and the South East, in contrast to Sainsbury’s, which registers 59% of its sales in those two areas.”

Rating agency Fitch warned Sainsbury’s and Asda faced an “unpredictable” investigation by the Competition and Markets Authority.