Concerns raised over future of Asda and Sainsburys in Flint following merger deal

Delyn MP David Hanson has raised concerns over Sainsbury’s proposed takeover of Asda.

The supermarket giants both have stores in Flint and Mr Hanson is seeking assurances neither of them will close. 

Sainsbury’s and Asda which is owned by US retailer Walmart – confirmed on Monday they are to merge in a £13-billion deal which will create Britain’s biggest supermarket group surpassing fierce rival Tesco.

Government have given a commons statement today on the proposed merger of asda & Sainsbury announced today-i pressed on action to ensure that suppliers are not squeezed by a larger market & to seek job assurance on stores like Flint where asda & sainsbury sit next to each other

— David Hanson (@DavidHansonMP) April 30, 2018

The new group will comprise of 2,800 stores and a workforce of 330,000 – both brand names will be retained and the companies say there are no plans for store closures.

Some analysts have said the new group could be forced to sell off some existing stores, most likely in areas where there would be no rival competition.

Richard Lim, chief executive of consultancy Retail Economics, says it is “inevitable” that the merged company will sell branches and he sees Morrison’s as the prime beneficiary. But he expects it will only buy the profitable stores in good locations that become available.

Speaking in Parliament on Monday during an Urgent Question asking the Secretary of State for Business to make a statement on the proposed deal David Hanson MP raised concerns about Flint, he said;

“To be clear, suppliers will not be squeezed, head offices will stay open and stores such as those in Flint, where there is an Asda next door to a Sainsbury’s, will both be open in two years’ time.

Has the Minister sought those assurances from the companies today?”

Under-Secretary of State for Business Andrew Griffiths MP said in response;

“Let me reiterate to the right hon. Gentleman that the matter of stores in the same town will be considered as part of the phase 2 investigation by the CMA panel.

It will consider the impact of the merger on individual towns.

If it believes that it is anti-competitive, that it will lead to a worse deal for the consumer if the two supermarkets—one being Asda, one being Sainsbury’s—stay open, and if it has concerns, it will force the sale to a competitor.”

Mr Hanson later said:

“The announcement over the weekend that Sainsbury’s wants to buy Asda is concerning. In particular it is concerning for towns, such as Flint, where we have both an Asda and a Sainsbury’s right next door to each other.

There are questions over the future of these sites and it will now be for the Competition and Markets Authority (CMA) to check if this merger is in the public interest.

The minister wanted to give assurances for the consumer, but when I pushed him on the hundreds of retail workers he said nothing. I want the Government to take action to ensure that no stores are closed and all jobs are protected.

The CMA has only started its investigation and I will continue to keep up pressure to ensure that we see no job losses.”

The Competition and Markets Authority confirmed the deal is likely to be reviewed.