Iceland eyeing Sainsbury’s and Asda stores

Iceland is considering a bid for the Sainsbury’s and Asda stores, which were put on the market after the Competition and Markets Authority (CMA) told the retailers that they must cut their stores in order to obtain regulatory clearance for the proposed merger.

The supermarket’s CEO Richard Walker, said that the stores in their current form “would be too big” for Iceland, adding “you can redevelop, you can carve up, you can put in neighbouring retailers alongside”. Walker said Iceland was “looking at everything” in terms of expansion and added that the retailer was “the only supermarket that is opening on retail parks”.

Sainsbury’s and Asda are expected to find out the results of the CMA’s probe into their merger this week. Analysts expect that the merger will be permitted as long as the retailers sell stores in order to reduce competition in areas where an overlap would cause a lack of competition.

Whilst Iceland’s stores are usually smaller than those belonging to the big four supermarkets, the company has opened up a new format of larger stores named The Food Warehouse. Iceland’s Food Warehouse stores cover twice the area of a standard Iceland store and run on lower gross margins however they are said to be easier to run according to Walker, “because they’re all square boxes”.