The Sainsbury’s and ASDA merger has been blocked by the UK’s competition watchdog to protect consumers and prevent shopping price hikes, decreased quality for customers, increased queues at the tills which would reduce the customer experience, in addition to an increased cost for consumers at the supermarket petrol stations.
Sainsbury’s have criticised the move however have confirmed that they will not be appealing the decision by the watchdog.
The two supermarket giants claimed that the merger would have cut their costs and led to reduced prices for customers across the UK, something that the CMA (The Competition and Markets Authority) firmly disagreed with. The CMA found that a reduction in competition in the grocery market in the UK might initially reduce costs however the prices for consumers would eventually raise once again, and even higher than they are currently.
It has been speculated that the move towards a merger from Sainsbury’s and ASDA was due to their fear of rival supermarket chains such as Lidl and Aldi.
The merger would have created the largest supermarket chain in the UK, surpassing Tesco, which is currently the top chain in the UK with over 3,400 stores across the country. ASDA has more than 600 stores in the UK and Sainsbury’s has over 1,400.