300 stores ‘could shut’ amid Sainsbury’s Asda merger

The result of the Sainsbury’s Asda merger could see up to 300 stores be forced to close if the merger was to go ahead according to new research.

Analysis by The Times, which used modelling techniques used by the Competition and Markets Authority (CMA) and found that up to 300 stores may be forced to close where the merger could run into local competition concerns.

The number is considerably higher than previous estimations that stated only around 75 stores would need to close. The Times report also said it is expected that around half of the locations are viable to be snapped up by ‘Big Four’ competitors Tesco and Morrisons.

The remaining stores could be acquired by discounters Aldi and Lidl as they look to continue their recent expansion plans.

If the merger is to go ahead it will create a business with a 31% share of the grocery sector, overtaking current leader Tesco on 28%. The combined revenue of both groups is estimated to be £51bn and one in three retail pounds will be spent with the new group.

The CMA has since confirmed that it was looking into the proposed deal and was in the “pre-notification” phase.

Back in June the CMA said: “When investigating a merger, the CMA’s mandate, by law, relates to assessing the potential impact of that merger on competition. This assessment is critical in ensuring that consumers are able to benefit from the lower prices, better service, or greater choice that effective competition is able to bring about.”