Sainsbury’s and Asda could be forced to sell 500 stores to push through merger

Asda sign. Photo : Steve Adams

Asda sign. Photo : Steve Adams - Credit: Steve Adams

Sainsbury's and Asda have been warned by the competition watchdog that their proposed merge is on thin ice after investigations revealed their supermarkets overlapped in 463 areas.

As a result of the findings, the supermarket giants could be forced to sell off some stores to get the go ahead.

The Competition and Markets Authority (CMA) said findings of its phase one inquiry into the £12bn deal found potential competition issues in almost 500 areas.

It raised concerns over 225 Sainsbury's stores and 238 Asda stores.

The CMA declined to comment on whether these pinch points were in Norfolk or Suffolk, and how they had measured which areas needed to be investigated further.

The CMA last week launched the second stage of its investigation into the merger, which will create a supermarket titan bigger than Tesco, with revenues of £51 billion and a network of 2,800 Sainsbury's, Asda and Argos stores.

The CMA said: 'The CMA believes that the merger may give rise to a realistic prospect of an SLC (substantial lessening of competition) in many of these local areas if Sainsbury's and Asda are insufficiently constrained by other local competitors.'

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A spokesman for Sainsbury's and Asda said: 'The grocery market has changed significantly in the last decade and is more competitive than ever, with the rise of discount formats, online grocery and food delivery businesses.

'We look forward to working with the CMA on the Phase 2 inquiry, where we expect it to conduct a full review of the market and take these changed market dynamics into consideration.'