Asda and Sainsbury’s merger could spark sale of almost 500 supermarkets
The planned merger could damage competition in 463 areas where the businesses overlap, the competition watchdog has warned
AROUND 500 stores could be sold as a result of the planned Sainsbury's and Asda merger, it has been revealed.
The watchdog has warned that joining forces could damage competition in 463 areas where the businesses overlap, meaning that some of the stores may have to be offloaded.
The Competition and Markets Authority (CMA) said that the lack of competition could have a negative impact on the prices shoppers pay.
It is the first real sign of the regulatory challenge facing Britain’s second and third largest supermarkets.
It means that the two could be forced to offload hundreds of stores to get their merger cleared.
The findings were included in the CMA's phase one investigation into the £12 billion merger, which took into account local competition from other supermarkets including Tesco and Morrisons, but not discounters such as Aldi and Lidl.
Sainsbury’s and Asda have called on the regulator to also include those in its calculations of risk to competition.
Last week the CMA launched the second and more in-depth phase of its investigation, which may come to a different conclusion compared to phase one.
It has previously said that where the stores overlap it could mean shoppers facing higher prices or a worse quality of service, and that it would not allow the deal to go ahead if its concerns are not fully addressed.
The two supermarkets say that the merger - announced in April this year - would create a group with 330,000 staff, £51 billion of revenues and a network of 2,800 stores - including outlets under the Argos brand which Sainsbury's bought in 2016.
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Following the announcement in April, Lidl and Aldi promised to keep prices lower than their rivals.
But earlier this month, Tesco opened the doors to its new discount chain Jack's in a bid to rival the two.
Meanwhile, Asda, Morrisons and Sainsbury's this week cut petrol prices by up to 2p, sparking a price war.
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