Sainsbury's and Asda set for giant retail merger

This could be one of those mega-mergers in the UK retail sector that sends huge ripples through the industry and will be the gift that keeps on giving for economics teachers and students. There is no doubt that a horizontal merger would attract the attention of the competition authorities including the Competition and Markets Authority and the Grocery Adjudicator. Part of the issue is that it is difficult to define what is the grocery market at the moment.

Aldi and Lidl have hit the headlines in recent times, but the rise of Amazon as a grocery retailer is also a potentially significant aspect to the discussion about competition in the sector.

We will add to the blog as details emerge of the proposed deal.

Brief background

• Asda is owned by US retailer Walmart
• Sainsbury's took over Argos and Habitat for £1.4bn in 2016.
• In 2017, Tesco merged with Booker - the UK's largest food wholesaler.
• Amazon bought Whole Foods.
• Aldi and Lidl have gained significant market share in recent years in part because of a rapid expansion of store openings.