Sainsbury’s share price: Watchdog sets out scope of Asda merger probe

on Oct 16, 2018
Updated: Mar 11, 2020

The Competition and Markets Authority (CMA) has outlines the areas which it will look into as it probes the proposed merger between J Sainsbury (LON:SBRY) and Asda. The news comes after the watchdog recently warned that the tie-up could impact competition in 463 local areas in the UK. 

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Sainsbury’s share price has fallen deep into the red in today’s session, pressured by the latest Kantar Worldpanel data, which showed that supermarket spending had cooled off in the 12 weeks to October 7. As of 14:46 BST, the grocer’s shares were changing hands 1.80 percent lower at 299.90p, as compared with about a 0.05-percent gain in the benchmark FTSE 100 index.

CMA updates on merger probe

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The CMA announced in a statement today that it will scrutinise groceries, bought both in-store and online, fuel as well as other items such as toys, small electricals and children’s clothing, as part of its investigation into the tie-up between Sainsbury’s and Asda, to assess whether the merger could result in a worse outcome for shoppers. The watchdog will also look at whether the merged company could use its increased buyer power to squeeze suppliers.

“Millions of people shop at Asda and Sainsbury’s every week, so it is essential we carry out a thorough investigation into their proposed merger,” Stuart McIntosh, chair of the independent inquiry group carrying out the in-depth investigation, commented in the statement.

The CMA expects to issue its provisional findings early next year, ahead of the deadline for its final decision on March 5.

Latest Kantar Worldpanel data

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In a separate development, Kantar Worldpanel disclosed that UK grocery sales at Sainsbury’s had grown by 0.6 percent in the 12 weeks ended October 7, achieving a market share of 15.4 percent, down 0.4 percentage points compared to last year. Asda meanwhile grew sales by 2.4 percent.

As of 15:08 BST, Tuesday, 16 October, J Sainsbury plc share price is 300.00p.


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