What do you think about the Asda & Sainsbury's merger? Watch

Joe2001
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#1
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I think it is a disaster waiting to happen.
You can bet that many stores will close. That will inevitably lead to large empty units in retail parks and job losses. Also, they both attract a very different clientele, so I'm not sure how it will work.

What are your thoughts?
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Drewski
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You're assuming a merger at the bottom level, not one at the top. Why?

What the reality of this most likely means is that the organisations come together for a common logistics and supply pool, meaning efficiencies and cost savings at that level, with the ability to buy in even greater bulk and lower prices in stores.

A merger involving one of the shops disappearing won't happen for the reasons you suggest.
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Joe2001
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(Original post by Drewski)
You're assuming a merger at the bottom level, not one at the top. Why?

What the reality of this most likely means is that the organisations come together for a common logistics and supply pool, meaning efficiencies and cost savings at that level, with the ability to buy in even greater bulk and lower prices in stores.

A merger involving one of the shops disappearing won't happen for the reasons you suggest.
I can't see them having two megastores in the same town. Some places have a Sainsbury's and Asda in close proximity to each other. I wouldn't worry about the Sainsbury's Local stores, as Asda aren't in that market, but the megastores is another issue.

My knowledge of business is limited, but I am a bit pessimistic about this.
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Drewski
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(Original post by Joe2001)
I can't see them having two megastores in the same town. Some places have a Sainsbury's and Asda in close proximity to each other. I wouldn't worry about the Sainsbury's Local stores, as Asda aren't in that market, but the megastores is another issue.

My knowledge of business is limited, but I am a bit pessimistic about this.
They're targeted at two different demographics.

This is, for them, about being able to lower their prices to compete with the discounters; Aldi and Lidl.
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Joe2001
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(Original post by Drewski)
They're targeted at two different demographics.

This is, for them, about being able to lower their prices to compete with the discounters; Aldi and Lidl.
I know that they are different demographics, which makes me wonder even more as to why they are doing this. Asda could compete with Lidl/Aldi, but Sainsbury's just doesn't target that market and would be unwise to do so.
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e^iπ
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Taken from BBC News

"Sainsbury's chief executive Mike Coupe also said the deal would not lead to store closures or job losses in stores."


This does not rule out job losses in the warehouses and in some other non-store roles though
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DrawTheLine
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It makes me a little uneasy. I view them as two different shops with different styles. I go to Sainsburys for certain things I don't go to Asda for. Where I come from we have a massive store of each, I don't want either of them to go. I don't know much about what would happen, but I like them being separate shops.
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Joe2001
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(Original post by e^iπ)
Taken from BBC News

"Sainsbury's chief executive Mike Coupe also said the deal would not lead to store closures or job losses in stores."


This does not rule out job losses in the warehouses and in some other non-store roles though
They will say that, but in a town with a Sainsbury's and an Asda, it is inevitable that one will close eventually.
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Joe2001
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(Original post by DrawTheLine)
It makes me a little uneasy. I view them as two different shops with different styles. I go to Sainsburys for certain things I don't go to Asda for. Where I come from we have a massive store of each, I don't want either of them to go. I don't know much about what would happen, but I like them being separate shops.
Completely agree. We don't have a Sainsbury's here, but there are a few nearby and it attracts a much different clientele to Asda with different prices, different foods and the people shopping at our local Asda tend to be single-mothers and the types without much money or gravitas. Asda is the only one of the big four that we rarely use. Quite often go to Tesco and Morrisons, with an occasional Sainsbury's visit if in an area with one.
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DrawTheLine
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(Original post by Joe2001)
Completely agree. We don't have a Sainsbury's here, but there are a few nearby and it attracts a much different clientele to Asda with different prices, different foods and the people shopping at our local Asda tend to be single-mothers and the types without much money or gravitas. Asda is the only one of the big four that we rarely use. Quite often go to Tesco and Morrisons, with an occasional Sainsbury's visit if in an area with one.
I prefer the clothes at Sainsburys so tbh that's my biggest concern, ha. I don't want the quality to be reduced if it's going in with Asda.
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e^iπ
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(Original post by Joe2001)
They will say that, but in a town with a Sainsbury's and an Asda, it is inevitable that one will close eventually.
As was said earlier, they cater to different markets and I don't think there was much competition between the two stores in the first place and it seems this merger was to take in the likes of Aldi and Lidl.
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the bear
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it is like North & South Korea if you ask me.
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Drewski
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(Original post by Joe2001)
I know that they are different demographics, which makes me wonder even more as to why they are doing this. Asda could compete with Lidl/Aldi, but Sainsbury's just doesn't target that market and would be unwise to do so.
Sainsbury's (along with Tesco and the others) have been losing market share to Aldi and Lidl for years, and still continue to do so.

Go do some reading about the food retail sector, then comment.
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Joe2001
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If they target two separate markets, how will they run as one company?
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Paracosm
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Don't really know why, but I'm very pleased about the whole thing.
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Drewski
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(Original post by Joe2001)
They will say that, but in a town with a Sainsbury's and an Asda, it is inevitable that one will close eventually.
No, it isn't.

You're only saying that because you don't understand the level of merger going on here.

This isn't a case of "X has been bought by Y".
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RepliedJewel
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it shows how bad working in retail actually is no job is safe these days
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999tigger
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#18
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Different but still supermarkets.
You see all sorts in Aldi these days as well.

Bad for customers and employees though. See what the CMA have to say.
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Drewski
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(Original post by Joe2001)
If they target two separate markets, how will they run as one company?
Common supply chain, logistic hubs, buying departments.

Both chains, for instance, buy Heinz baked beans. Being able to buy twice the volume means being able to get a better deal, lowering the cost in store.

Very simple economics.
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thatapanydude
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Should not make much difference since both brands will stay. Only issue is where there are 2 superstores in close proximity what happens?

Personally I have a bit of a bias to Sainsbury's so hopefully they can still stay on or even take over some of Asda stores.
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