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Sainsbury's and Asda merger raises fears over Northern Ireland jobs and stores

Supermarkets planning to join forces to create new retail giant


Sainsbury's and Asda have confirmed they are in advanced talks over a merger (Stock picture)

Sainsbury's and Asda have confirmed they are in advanced talks over a merger (Stock picture)

Sainsbury's and Asda have confirmed they are in advanced talks over a merger (Stock picture)

Store closures and job losses are inevitable in Northern Ireland if the merger between supermarket giants Sainsbury's and Asda goes ahead, a retail expert has warned.

The duo, which together are thought to employ around 5,000 people here, confirmed they are in advanced talks over a merger which would create a new supermarket giant with over £50bn in sales.

Retail analyst Donald McFetridge said the Competition and Markets Authority (CMA) watchdog will insist on closures where monopolies could exist if the two join forces.

Trade union Unite has called for "guarantees on jobs" and demanded sit down meetings with senior bosses at both Sainsbury's and Asda. The chains have a total of 31 branches in Northern Ireland. Sainsbury's has 14 and Asda 17.

Both supermarkets have stores in Belfast and Bangor. Mr McFetridge said that ahead of previous mergers the CMA has "called for stores to be sold off where local monopolies exist".

"This could potentially lead to some store closures and job losses in Northern Ireland as well as in other geographic regions of the UK," he said.

"In this region, Sainsbury's had originally planned to have a store portfolio of 20 stores - they currently have 14. Asda (when it took over the Morrisons store portfolio in Northern Ireland) was also keen to expand.

"Both groups have found it has been extremely difficult to do so, although Asda has been successful in gaining planning permission for a number of new stores."

Mr McFetridge said the deal would also be bad news for suppliers. "Suppliers will undoubtedly be further squeezed for tighter and tighter margins, which could very easily result in job losses in the supply chain," he added.

Retail NI chief executive Glyn Roberts added: "If this proposed merger takes place, it will be a significant game changer for grocery retailing, locally and nationally.

"If this merger of the UK's second and third largest multiple supermarkets takes place, £1 in every £3 spend will be spent in this new giant.

"Retail NI has concerns about the impact this would have on squeezing many smaller suppliers as this new business will have huge buying power.

"This will have to be examined by the Competition and Markets Authority."

Mr Roberts added he has "no doubt that our local independent grocery sector will move forward and continue to provide choice, quality and a competitive price for consumers".

"Big is no longer beautiful when it comes to retail," he said.

Asda recently announced plans to open its 18th store in Northern Ireland at the former headquarters of Nortel in Newtownabbey.

According to the most recent report from research organisation Kantar Worldpanel, NI consumers have boosted their supermarket spending over the last year, with overall growth of 2.1%. That was the province's strongest year-on-year growth since May 2014.

Tesco remains NI's biggest supermarket, with sales growth of 3.3% in the 52 weeks to March 2018 and a market share of 35.2%. Sainsbury's had the second-biggest supermarket share at 17.3%, while Asda had 1% growth sales but its market share fell to 17.1%.

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