retail news in context, analysis with attitude

In the UK, the BBC reports this morning, the Competition and Markets Authority (CMA) has said that it may block the merger of supermarket chains Sainsbury and Walmart-owned Asda, pointing to its belief that such a deal would result in higher prices and fewer choices.

According to the story, the competition watchdog said that it could either prevent the deal or “ force the sale of a large number of stores or even one of the brand names.”

Stuart McIntosh, chair of the CMA's independent inquiry group, is quoted in the story as saying that it had found "very significant competition concerns in a number of areas - they are to do with grocery shopping in supermarkets, grocery shopping online and the companies' petrol stations … if one recognises that the competition concerns are quite broadly based... putting together a package of measures which addresses those concerns is likely to be complex and quite challenging.”

Sainsbury CEO Mike Coupe (no relation, as far as we know, to the Content Guy) tells the BBC that the CMA analysis is "fundamentally flawed” and totally outrageous … They have fundamentally moved the goalposts, changed the shape of the ball and chosen a different playing field.” He pledged to fight for the deal to occur as planned.

The BBC writes that “supermarket bosses know that British competition regulators have always had a strong interest in the grocery market. There has been a string of inquiries over the last two decades, both into individual deals and the bigger question of how well the market serves consumer interests.

“So Sainsbury's board members would have been nervous when they proposed a takeover of Asda last year - but they did at least have the encouragement that the Competition and Markets Authority (CMA) had approved a tie-up between Tesco and Booker just a few months earlier.”
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