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Focus Summer 2018
So it’s offical Sainsburys and Asda are to merge. In a blaze of
publicity Sainsburys has spelled out the terms of its planned
merger promising that shoppers would get a 10% cut in the
price of popular foods as a result.
It said it would pay Walmart, the US owner of Leeds-based Asda,
nearly £3bn in cash and give it a 42% stake in the combined
business to complete the deal.
The companies said both brand names would be retained and
there were no plans for store closures as a result of creating the
group comprising 2,800 stores with sales of £51bn, overtaking
Tesco to become the UK’s largest retailer, with a workforce of
330,000 people.
Supermarket Shakeup
This is merger is not entirely news as Asda have been
searching for a buyer since 2016 when it became clear that
they were being squeezed by the other players in the market
and their owner WalMart was turning its attention away from
the UK and towards China.
It is also no coincidence that the merger comes at a time when
Amazon is launching a full online supermarket service in the
UK. Amazon Prime customers in central and east London are
already able to order a full weekly shop and get it delivered
the same day. Amazon also plan to roll the deliveries out
further across the UK, but has not set a specific date. "We are
launching with a comprehensive offer in a limited area and will
take our time to hone our service," said Ajay Kavan from
AmazonFresh.
Disruptive game-changer
According to retail expert Bryan Roberts, from TCC Global,
although the recent launch is limited to 69 postcodes in
London it will be the last thing the big four grocers - and Ocado
- wanted to hear. "While there is no cast-iron guarantee of
success... I'm tempted to believe that we'll look back on today
as something of a disruptive game-changer up there with the
entry of Aldi and Lidl," he said.
Amazon recently did a deal with Morrisons, making hundreds
of products available through its website. This is now being
increased and food from other suppliers will also be on offer.
It means that customers will be able to shop from 130,000
products, including fresh fruit and vegetables, at prices which
Amazon claims will be more competitive than the main
grocers. It will also offer specialty food from 50 local suppliers.
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