Merger goes with the slow

Growth stunted for stores joining forces

SHOP prices fell one per cent in April, marking five years of deflation. The yearon-year decline in non-food items increased from 1.9 in March to 2.2 per cent last month, according to the British Retail Consortium and Nielsen. But food inflation picked up from 0.4 to one per cent on the back of higher global commodity prices. 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 per cent 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 per cent.

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 titans Tesco, with 2800 stores, 330,000 staff and £51billion of sales. But Kantar’s research found Sainsbury’s market share was down to 15.9 per cent and Asda at 15.5 per cent – whereas Tesco’s remained at 27.6 per cent, with their sales up 2.1 per cent in the three months to April 22.

Sales at Morrisons were up 2.2 per cent – and discount grocers Aldi saw takings jump 7.7 per cent, with rivals Lidl up 9.1 per cent. Waitrose are also struggling, notching up just 0.2 per cent in sales growth, with their market share falling to 5.1 per cent.

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 achieve nearly two-thirds of sales outside London and the south-east, in contrast to Sainsbury’s, who register 59 per cent of sales in those areas.”

Rating agency Fitch warned Sainsbury’s and Asda faced an “unpredictable” investigation by the Competition and Markets Authority. ■■BP have notched up their best quarterly results for three years, with profits surging 71 per cent to £1.9billion between January and March. ■■Takeaway partner firm Just Eat have handled their 400 millionth order in the UK. The milestone helped sales rise 49 per cent to £177million in the first three months of

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