Sainsbury’s offers to sell 150 stores
SAINSBURY’S and Asda have agreed to sell off as many as 150 supermarkets in a desperate bid to get their £14bn merger approved.
In its latest submission to the Competition and Markets Authority, Sainsbury’s lashed out at the regulator saying its proposals for a drastic wave of closures are impossible to implement.
But it has suggested the two supermarkets could sell between 125 and 150 stores to get the deal over the line. This is likely to be significantly lower than proposals set out by the CMA, which identified more than 600 areas where it believes the merger would damage competition because Asda and Sainsbury’s stores are so close together.
It suggested the deal could be blocked if the grocers do not agree to sell off the required number of stores.
A Sainsbury’s spokesman said: ‘The remedy appears to have been designed to be impossible to implement. As such, it is prohibition in all but name.’
Sainsbury’s has criticised the competition watchdog for making ‘significant errors’ in its analysis of the merger.
Just this week the grocer was accused of desperation by a rival supermarket as it promised £1bn worth of price cuts to customers if the tie-up is approved. It has also pledged to cap how much profit it makes selling petrol and diesel.
Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said: ‘At first glance, the proposals look like a decent compromise in response to the CMA’s previous ruling. However, the proposed number of store sales is unlikely to be enough to appease the competition regulator. There’s a fair chance today’s proposals simply won’t be enough to convince the watchdog that the merger between Asda and Sainsbury’s wouldn’t create a competition problem.’
Trade unions accused Sainsbury’s of reneging on its promise that the merger would not result in job losses when the deal was first announced.
Gary Carter, national officer for GMB, said: ‘This offer to flog off 150 stores is both desperate and disrespectful. This is people’s lives and livelihoods we’re talking about, and GMB openly opposes this move.’