£1bn price cuts promised in Sainsbury’s and Asda merger
Supermarket giants Sainsbury’s and Asda have pledged to deliver £1bn worth of price cuts after a competition ruling threatens their proposed merger.
The retailers have outlined plans to sell some stores and petrol stations to ease the Competition and Markets Authority’s (CMA) concerns that the merger will stifle competition, drive up prices and result in a lower quality of product for consumers.
Other proposed plans include the review of price commitments by a third party on an annual basis to ensure the merger is delivering on its pledge.
Last month’s provisional report by the CMA expressed “extensive” concerns with the planned merger, which would see the two supermarket chains combine operations but keep their separate brands.
Both retailers have stated that they found errors in the report, and maintain that the merger would be to the benefit of consumers by allowing each brand to streamline operations.
In a joint statement, Sainsbury’s chief executive Mike Coupe and Asda chief executive Roger Burnley commented: “We are trying to bring our businesses together so that we can help millions of customers make significant savings on their shopping and their fuel costs, two of their biggest regular outgoings.
“We have proposed a reasonable yet conservative remedy package and hope the CMA considers this so that we can deliver the cost savings for customers.”
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