One of bigger supermarket chain in UK has made a great deal with another big name from UK. Asda, which is the part of Wal-Mart, has successfully made a agreement with Sainsbury’s. Both of these big supermarket chain decide to create plan to merge. According to both supermarket representatives, with this movement, there is possibility that it will affect the grocery prices on both supermarkets, which mostly it will fall.
However, although there is some worries that there is other effect than just the falling price, Mike Coupe; Sainsbury’s chief executive said that the effect will be only that. There is nothing to worry about other effect like the job losses and store closure after the merges is activated.
For the price itself, Mr. Coupe said that the price will be cut into one third of actual price that consumer need to play. Basically, for every £3 that the consumer paid for their groceries, they will only pay almost £1 for that. According the both supermarket representative, the merger will make the price decrease for around 10% for other product than groceries. They hope that this discount can be realized, so consumer will get benefits from this plan.
But, Mr. Coupe still believes that this merging plan is the best place that both companies can come up with. These two supermarkets have capability in completing each other. By combining them, it will create one bigger and better supermarket that you can see. The good effect of this plan can already been seen from the Sainsbury’s shares value that increase for 16% when this news came out. On the other hand, when the merger plan was successfully finished, Wal-Mart as the owner of Asda since 1999, will own 42% of the shares from the two businesses that will be combined later, like what agreement state.
After the merging, Sainsbury’s and Asda won’t change their brand. They will become two different brands like before. There are also no stores that will be closed because of this merging. It will be like before, but with better plan, financial support and management system. There was indeed rumor that said there will be store closing and such. But, Mr. Coupe denied it clearly that that won’t be happened at all. Just like when Sainsbury’s executed the acquisition plan on Argos in 2016. Sainsbury’s only change the catalogue retailer on those stores, so it will match with the retailer that they used.