No distribution centres will be closed if the proposed merger between Sainsbury’s and Asda gets the green light, Sainsbury’s chief executive Mike Coupe has pledged.
However there could be cuts to suppliers currently working with both supermarkets, and a reduction in supplier deliveries, according to information supplied by both supermarkets to the House of Commons Business, Energy and Industrial Strategy Committee.
Writing in response to the committee’s request for information on the planned merger’s impact on jobs and suppliers, Sainsbury’s group chief executive Mike Coupe said: “I can confirm that none of the synergies in our plan are based on us closing any stores or distribution centres, adding that the growth of online shopping would result in the employment of greater numbers of delivery drivers and in-store pickers."
Coupe said the merger could result in fewer deliveries for some suppliers, as suppliers to the formerly separate businesses streamline their deliveries.
“Examples of where we have done this previously include working in partnership with suppliers to reduce the number of deliveries to depots.
"This means their lorries are fuller and they can reduce their costs as well as their environmental impact.”
Asda Stores chief executive Roger Burnley echoed this view in his written response to the committee’s request for information on the merger.
He said: “As volumes grow, there will inevitably be economies of scale, especially for suppliers who currently supply Asda and Sainsbury’s with the same goods.”
Both letters were published on the Committee’s website this week.
The proposed merger of the two supermarkets, announced in April this year, is currently being investigated by the Competition and Markets Authority (CMA). If the CMA gives it the go-ahead it will create the UK’s largest supermarket chain, with a 60% share of the market.
The committee has called on CMA to “look closely at the impact of this merger on the supply chain as well as the effect on competition in the supermarket sector”, warning that any cost savings “must not come through squeezing those further down the supply chain”.
CMA has published a preliminary “invitation to comment” on its website and is also planning to contact interested parties as part of its investigation.
The CMA investigation is expected to be completed early next year.
