The Competition and Markets Authority has calculated that the planned merger between Sainsbury’s and Asda will lead to a significant lessening of competition in 463 local areas.
The merger has been referred for an in-depth Phase 2 investigation, which could result in the two retailers being forced to divest themselves of these sites unless they can persuade the regulators otherwise.
The CMA identified overlaps between the Parties’ stores based on the store size categories and geographic catchment areas. “This results in 363 overlaps, when the assessment is centred on Sainsbury’s OSS and MSS stores, and 372 overlaps, when the assessment is centred on Asda’s OSS and MSS stores.”
In each of these local areas, the CMA applied a filtering methodology. A local area failed the filter where the merger would result in a reduction in retail fascia from 4 to 3 or worse.
Applying these criteria, 225 Sainsbury’s stores and 238 Asda stores fail the filter – to give the total of 463.