Under the proposed Sainsbury’s and Asda merger a total of 73 supermarkets are at risk of being closed.
The Competition and Markets Authority (CMA) still has to approve the merger and the deal is expected to be heavily scrutinised by the competition watchdog.
The CMA has a responsibility of preventing companies from becoming too big or having too much control of a market.
If the deal does go ahead many experts believe that Asda or Sainsbury’s will have to close some of their stores.
David Haywood founder of Maximise UK revealed that at least 6% (73) of the combined retailer’s shops may have to be shut for the deal to get the green light from regulators.
David Haywood told the BBC:
“There hasn’t been a retail deal like this in more than a decade The real focus will be on how Sainsbury’s and Asda’s main supermarkets operate at a local level and how they overlap. The CMA will be concerned about whether the deal reduces the number of competing brands within a 10 or 15 minute drive time.”
The estimate of 73 store closures is based on the scenario where the CMA includes German discount retailers Lidl and Aldi as competitors.
In the event the CMA does not consider Aldi and Lidl then Sainsbury’s and Asda could be forced to close up to 245 stores.