Sainsbury’s and Asda may have to sell at least 73 stores in order for the merger to go ahead according to a leading expert in store location.
David Haywood founder of Maximise UK predicts that at least 6% of Sainsbury’s and Asda stores are under threat of closure, due to the fact there would be no competition within a 10 to 15 minute drive.
Aldi and Lidl, who make up 12% of the grocery market will be an important part of whether the deal goes ahead, as if the Competitive Markets Authority (CMA) doesn’t choose to include them as competition then 245 Asda and Sainsbury’s stores may have to be closed.
Haywood told media: “The real focus will be on how Sainsbury’s and Asda’s main supermarkets operate at a local level and how they overlap. The CMA will be concerned about whether the deal reduces the number of competing brands within a 10 or 15 minute drive time.”
The majority of stores that would need to be closed are located in the South East and North West of England. Haywood added: “For me this is the real issue regarding these overlapping catchment areas. Considering that 66% of the stores caught in the overlap analysis have selling areas over 20,000 sq ft, the key issue is who can actually acquire store locations of this size. They’re typically too big for an Aldi or a Lidl.”
Haywood oversaw the takeover of Safeway by Morrisons in 2004.