Sainsbury’s and Asda in talks to merge

MooMoo444 said:
Why would it? It puts them the same size as Tesco.
Click to expand...
It would put them 4% higher, and Tesco have earned that amount of the market without mergers. They have big supermarkets as well as small corner shops.
Sainsburys tried to buy Safeway years ago, and they got turned down straight away as they were too large, whereas Morrison's being on of the smallest, were allowed to purchase them on the basis Morrison's closed down 53 stores.
Everything has to be fair, two businesses merging to become the biggest supermarket definitely isn't fair.
 
Top_gun said:
Not sure I care too much about the merger between the two supermarket groups. I think more and more people recognise they can get a far better experience and value with the independent shops.

I do most of my shopping in Aldi and Lidl for the past seven years. Butchers, fishmongers and independent stores for other items. Before then, I mainly shopped in Waitrose for a number of years. I tend to use the large Sainsburys, ASDA and Tesco as corner shops for the odd items here or there! I can't stand Morrisons. Probably, the most backward supermarket group I've ever come across though I do agree their fishmongers and butchers are not bad. However, I'm not convinced their fish is really fresh and their free range chicken is actually free range.



Some of the own brand is actually the same or better quality than the brands. Some are actually made by the brands themselves. The premium Aldi pizzas are far superior to the JS ones through taste and generous toppings (compare weight size) even though the box size between the two is exactly the same size in area. Chances are, both products is likely JS has the cheek to charge roughly two pounds more for a below par product.

However, I do recognise there are many people who are conditioned by marketing. How many of them have the ability to recognise quality in a blind taste test? Not very many, I say. Price isn't always an indicator of quality.
Click to expand...
Most of the time supermarkets have a contract with a manufacturer, they'll send off they're recipe (if it's food) and the manufacturer would make it.
This is the case with Kingsmill and Asda, asda send them their recipe, Kingsmill make it and send it to them, it even comes on the same van as Kingsmills.
 
what about tesco buying out bookers wholesale's. tesco are being reported as being bigger than a few chains put together. shirley the competition watchdog should be all over that.

Analysts noted that with a market capitalisation of just under £20bn, Tesco is now bigger than the whole of rivals Sainsbury’s, Morrisons, Marks & Spencer and Ocado put together.
Click to expand...
 
I'm not going to post anything else in this thread. I do work for one of the companies/parent companies/subsidiaries involved here.
Obviously everything has been accelerated due to information being leaked on Saturday, officially it was going to be announced on Wednesday this week.
We've been told no store closures planned, however possibility of some stores changing from one to the other. Also possible we'll see an Argos pop-up inside an ASDA for example.
It's a good overlap as ASDA are stronger up North, Sainsbury's down South - also Asda seen as more budget and Sainsbury's as more premium.
However, as I mentioned earlier, 18-24 months with the trade commission before anything happens.

I'm only bowing out because I'm sure I'll see information I cannot share and I won't risk posting something I shouldn't! Everything I have said is public knowledge, but it shouldn't be seen as one taking over the other, very much a joint operation.
 
GamingDaddy said:
There's no way this'll go through, especially if they say they don't plan on closing any stores down.

Competition law will be thrown all over this
Click to expand...

They say there's "no plans" but then say they were forced to by the CMA so they can spin it as out of their hands. Any backend functions that are duplicated from admin/head office/IT/distribution will also at some point have to be rationalised ie people will be sacked in order to maximise profits.
 
Steampunk said:
They say there's "no plans" but then say they were forced to by the CMA so they can spin it as out of their hands. Any backend functions that are duplicated from admin/head office/IT/distribution will also at some point have to be rationalised ie people will be sacked in order to maximise profits.
Click to expand...
To be honest if Morrison's were told to close 53 stores to purchase Safeway, it's gonna be a **** ton more store closures if this actually does go through.
The outcry from store closures probably would diminish store credibility massively so I doubt they would even go through with it.
 
Jimbeam3678 said:
To answer your question on IT they use a heavily customised version of the old italics (sp) Epos software.

They will be some overlap but from the little I do know about it they will still be a large amount of work to be done.
Click to expand...

Sainsbury's are way ahead of Asda in terms of IT, from a store-side perspective at least. Asda's stock systems etc are archaic, or at least they were a few years ago. Sainsbury's have had NCR tills running XP for over a decade, I've no idea what Asda have now but certainly a few years back they were still using tills with tiny monochrome LCD displays.
 
As usual the same old stories appear in the press and everyone has an opinion. Unions and public talk the same old 'ite :D. British do what they do well, whinge :P
I am biased as I own Sainsbury's shares.
With the UK high street all over the place, shops closing, I don't think anyone is going to stand in their way. The other alternative is that Walmart cannot make Asda work so they sell off to someone else (Aldi, Lidl/Investment company who may try to tear apart and sell off pieces?) or simply just close them down, and that would cause chaos to the neighbourhoods affected. Supermarkets are not making easy money these days.
Tesco bought booker and I see no problem with Asda being brought back to UK ownership and owned/run by Sainsbury's. We all moan when companies get sold off abroad, now we have a company being brought back to UK company ownership.
 
Last edited:
I don't even pack at the packing bench at ALDI, I put everything back in trolley and do it all at the car. Couple of big bags in boot, sorted.

And those scan and shop things in Tesco and Asda, everything you scan is then sent through a server to the till, it's not being dumped onto the till from the scanner when you checkout.
 
There is 0 chance of having no store closures. Where I stay there's 2 huge Asdas right across a fence from large Sainsbury's. No chance they'd keep both long term.
 
Kaeo said:
There is 0 chance of having no store closures. Where I stay there's 2 huge Asdas right across a fence from large Sainsbury's. No chance they'd keep both long term.
Click to expand...
But are they both very busy stores? They're aimed at different target markets.
Where I live all of Asda, Sainsbury and also Tesco stores are all VERY busy stores. None will be closing because the other stores wont be able to support the new customers
 
Last edited:
For Sainsbury's and Wal-Mart this deal sounds great. For Asda, not so much.

Sainsbury's gains a sub-brand that can compete directly with the discounters, along with more floor space and more customers for TU, Argos, Sainsbury's Bank, Nectar, and whatever else they have lined up (I doubt this is the end).

Wal-Mart gain a 42% stake in a business that is under less pressure from the discounters, and is able to better compete with Tesco and Amazon.

Asda loses some of its identity and basically becomes "Aldi, by Sainsbury's" but with added non-food products from elsewhere in the Sainsbury's group.

Kudos to Mike Coupe though. He's certainly been a bold CEO, making bigger decisions than anyone else in the industry. It seems that Sainsbury's has a vision of what it wants to be, and is heading there. Most of the competition is still standing around looking bemused about the pace of change.
 
Last edited:
DarrenM343 said:
I am biased as I own Sainsbury's shares.
Click to expand...

Me too - funny the other day some of the people I talk to about it were saying "nothing interesting ever happens with Sainsbury's to affect the share price its just the same old same old all you ever get is a dividend" then barely a few hours later this was announced.

EDIT: As I suspected:

Walmart will become one of our long-term and supportive shareholders, and it is expected that two representatives from Walmart will join the Sainsbury’s PLC board as non-executive directors.
Click to expand...
 
Sainsbury's and Asda will remain separate brands and no stores will close, Mr Coupe told the BBC.

"There's been a bit of commentary over the weekend where people have been alluding to the fact that the only way of making this happen is by closing stores - that is not true," said Mr Coupe.
Click to expand...

Having worked in a Sainsbury's store in various different areas I struggle to see how this will actually be the case, some places have a Sainsbury's and an Asda store practically side by side, my thought is that they will run them like this for a year or two, let the dust settle from the merger and then claim it isn't working having them both open so one must close. Whilst they intend to run separately it simply seems a pointless waste of money, and yes I'm thinking of my Sainsbury's shares here, but that aside, the cost of keeping a store open is huge when you think of maintenance, electricity, council taxes, insurance, etc. The best case scenario in these instances would be to move into the more profitable store, merge the product ranges and the best case scenario for staff would be to move them across to the combined site avoiding any more redundancies.

Actually I wonder how long these talks have been going on in secret before going to press, and with that if the mass redundancies Sainsbury's are handing out is so that they can take in Asda staff.
 
They will almost definitely be looking to streamline costs in the long run such as ground rent where stores aren't owned, etc. etc. but it might not necessarily be as straight up as closing stores - if for instance there is say a bigger Asda near a Sainsbury's they might look at putting an Argos inside the Asda and closing the nearest Argos, etc. and possibly pick up some other businesses along the way they can move into one of those stores as concession stores.
 
opstrat said:
what about tesco buying out bookers wholesale's. tesco are being reported as being bigger than a few chains put together. shirley the competition watchdog should be all over that.
Click to expand...

Booker and Tesco compete in completely different markets. The former caters to those looking to buy goods to re-sell (business to business sales) and the other is selling direct to consumers.

Where as Asda and Sainsbury are both selling selling direct to consumer and will reduce competition in the market. The regulators will be all over this like a bad rash, far more so than the Tesco Booker deal.

The only plus side that I can see for consumers is the potential for Argos in Asda stores and an improved non food offering at Asda. I guess Aldi and Lidl will keep them honest when it comes to food prices somewhat.

As for online sales, its a loss leader for all supermarkets, they don't actually make money on it. They just do it because they have to.

I can't see this going through without a whole load of consolidation, starting with the back end. There will be job losses across the board, its the only way it makes sense.
 
You must log in or register to reply here.
Back
Top Bottom