Sainsbury’s vows to reduce prices after the merger of Asda

Sainsbury’s and spelled out the conditions of its planned merger with rival Asda promised that the buyers will receive 10% reduced price on popular products as a result.

He said he will pay Wal-Mart, us owner of Leeds-based Asda, about £3 billion in cash and give it a 42% stake in the merged business, to complete the transaction.

The company said that both brands will be retained and there were no plans to close the store, in the establishment of the group, including 2,800 stores with sales of £51 billion, overtaking Tesco to become the UK’s largest retailer, employing 330,000 people.

Three supermarkets a Short guide UK

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1) Tesco

Head office and trade garden city
Chief Executive Dave Lewis
Stores 6,809 worldwide/3,400 UK
Staff 460,000/310,000 UK
Market share of 27.6%
Annual sales of £51 billion
Profit last year of £1.3 billion.
Buyer visits a week 79m wandered (around the world)

2) Sainsbury’s

Head office London
Chief Executive Mike coupe
Stores 1,414 grocery stores (+ 800 Argos)
Employees 195,000
Market share of 15.8%
Annual sales of £29 billion
Profit last year of £503m
The customer attends the week 26m

3) Asda

Head office Leeds
Chief Executive Roger Burnley
Stores 642
Employees 165,000
The market shares of 15.6%
Annual sales of £22 billion (2016)
Profit for last year n/a
The customer visits the week of the 18th

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However, the Executive Director of Sainsbury’s, Mike coupe, said that some stores may be sold to other grocery stores, if the regulators of competition.

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Rebecca long-Bailey, the shadow business Secretary, warned about the consequences of the transaction on suppliers and the General Secretary of the GMB, Tim roach, said that the deal could hit jobs.

John Colley, Professor at the business school of Warwick, said: “ultimately there must be a loss of jobs and suppliers will be forced to pay more competitive prices … buyers will see reduced choice”.

However, answering an important question about the deal in Parliament, the Minister for enterprise, Andrew Griffiths, seem to support the merger, claiming that two grocers were attempts to “get ahead of the curve” in a competitive market.

Sainsbury’s shares soared 20% after the stock market welcomed the details of the transaction on Monday morning and closes in up to 15% to 320p, the highest level since 2014.

The proposed merger of the UK’s second and third largest retailers, is expected to cause serious inquiry competition. Analysts predicted that if the deal were approved, it would lead to at least 75 Disposals store to ensure the competition does not suffer. – It will be a big shake on the market since Morrison bought safeway in 2003, when dozens of stores were changed.

Said Sainsbury’s merger will not be completed until the second half of 2019, as regulators will have to calculate the possible overlap between the two groups, and the impact on competition in the local market.

Sainsbury’s and Asda promise to reduce prices after the approval of the transaction to create the largest supermarket chain in the UK – business video

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Coupe, who plans to lead the merged business, said the deal was “transformational opportunity to create a new force in UK retail, which will be more competitive and to give customers more of what they want now and in the future.” He insisted that the merger will be “Internet for all”, with benefits for customers, employees, suppliers and shareholders.

Market share

Market share

Coupe said the retail landscape has changed dramatically with the Morrisons Internet/shop, with the rise of discounters aldi and lidl and online specialists headed Amazon.

“It’s never been more competitive and customers have more choices than ever, not only in the grocery sector but in other sectors of retail trade. You can see the consequences of that play every day,” said coupe.

The CMA confirmed that the deal should be investigated and Sainsbury’s said it asked the watchdog to proceed to a detailed “second stage” stage.

The number of stores

The number of stores

Coupe said that regulators are concerned about, mainly, the impact on consumers who, according to him, benefit from lower prices and more choice in how they went shopping, as a result of technology investments.

He said the merger will allow us to deliver at least £500 million in savings and other benefits, mainly as a result of increased efficiency and better deals with suppliers.

John Hannett, General Secretary of the Usdaw Union, said:both companies operate a substantial nationwide distribution network with thousands of employees. We will seek urgent clarification on the future for these workers.”

The number of staff

The number of staff

Coupe admitted that some head office functions can be combined over time, but insisted on new jobs will also be created.

Asda will continue to be run from Leeds with your boss is likely to be the current boss, Roger Burnley, who have only recently joined Asda from Sainsbury’s.

Annual sales

Annual sales

Coupe insisted that Sainsbury’s brand, which boasts the better welfare and quality standards of food, will not be infringed in connection with Walmart, the international retail giant known for its low prices.

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The deal will allow the company Walmart, which bought Asda almost 20 years ago, to take a step back from the UK market where it is struggling to compete with aldi and lidl as well as tesco, which controls nearly a third of the grocery market.

Judith McKenna, CEO of Walmart International, said, “We believe that this combination will create a new dynamic retail player better suited for success in a rapidly changing and competitive UK market”.

She said that Walmart was interested in expanding the network of Sainsbury’s owned by Argos services at the international level and can help the combined entity due to the introduction of new technology and best prices on nonfood items.

The largest shareholder in Sainsbury’s , investment authority of Qatar, which owns a 22% stake, announced its intention to support the merger.

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