Deal suggests a sell-off’s in store

Sainsbury’s and Asda could be forced to sell hundreds of stores to clinch a £12billion mega-merger.

The Competition and Markets Authority, which is probing the deal, found there were 463 places where the two supermarkets had stores close to one another. Allowing them to keep them all risked a “significant lessening of competition,” it said.

The CMA is worried this concentration of power could lead to higher prices for shoppers, and suppliers’ margins being harmed.

The merged business would leapfrog Tesco to become Britain’s biggest supermarket group, with annual sales of £51bn and 2,800 stores.

Despite the overlap, industry analysts reckon the number of stores Sainsbury’s and Asda will have to close would be far lower than the 463 figure given by the CMA.

The watchdog launched the second stage of its investigation into the merger last week.

A spokesman for Sainsbury’s and Asda said: “The grocery market has changed significantly in the last decade and is more competitive than ever, with the rise of discount formats, online grocery and food delivery businesses.”