Money: Sainsbury's says can thrive with or without Asda - PressFrom - United Kingdom

MoneySainsbury's says can thrive with or without Asda

18:10  08 november  2018
18:10  08 november  2018 Source:

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Sainsbury ' s and Asda will remain separate brands and no stores will close, Mr Coupe told the BBC. Sainsbury ' s and Asda executives said one advantage of the merger would be the opportunity to bring in "the power of Walmart in the form of buying of general merchandise and in the form of their systems

The proposed Sainsbury - Asda merger, he said , “shows that the two chains feel they will be stronger together as they reposition themselves to combat the The new Sainsbury - Asda group would also be able to benefit from Walmart’ s huge investment in digital innovations, such as a smartphone shopping

Sainsbury's says can thrive with or without Asda © Getty British supermarket group Sainsbury's talked up its prospects with or without Asda, the close rival it has agreed to buy, after beating forecasts with a 20 percent rise in first half profit. The 7.3 billion pound deal to buy the UK arm of Walmart , a transaction that could see the combined group leapfrog Tesco as Britain's biggest retailer, is being assessed by the Competition and Markets Authority (CMA).

The CMA said last month it expected to issue provisional findings early next year.

Sainsbury's and Asda have both said they believe the CMA will not insist on a level of store disposals that will make the deal, announced in April, unattractive.

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Andrew Griffiths says that Sainsbury and Asda hope the CMA will hold a ‘fast-track’ review. If that happens, then the detailed Phase 2 investigation If they are both “ thriving supermarkets”, either the CMA will decide there isn’t a competition issue and allow the combined company to keep running both

Retailers say they plan no store closures as they unveil deal to create UK’ s biggest supermarket chain.

"We remain confident in the case that we're making to the CMA," said Chief Executive Mike Coupe, noting Sainsbury's "key and central" argument was that the deal would lower prices for customers.

The CEO also told reporters that Sainsbury's was on the right track in a sector that has faced pressure from the rise of discount chains and fears that online shopping giants could muscle into the territory.

"We have a clear strategy and you can see in the numbers today we’re delivering against that strategy. We’re adapting our business to changes in customers' behaviour and we’ll continue to do so,” Coupe said.

"We’re confident in our future whatever basis that future is."

Coupe has already reshaped the group by buying general merchandise retailer Argos for £1.1 billion in 2016.

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Sainsbury ' s and Asda say their planned £13bn merger will maintain the number of stores operated by the two brands and cut shoppers' costs. The deal - likely to face close scrutiny by competition authorities - will create a grocery powerhouse overtaking Tesco as the number one player in the

Sainsbury's says can thrive with or without Asda © Reuters/Peter Nicholls FILE PHOTO: Customers shop in a Sainsbury's store in Redhill BEATING FORECASTS

Although industry data shows Sainsbury's trading performance is lagging rivals, its shares are up 32 percent this year on the back of the Asda proposal. The stock was little changed at 1020 GMT.

Sainsbury's made an underlying pretax profit of £302 million ($396.8 million) in the 28 weeks to Sept. 22 - ahead of analysts' mean forecast of 280 million. Group sales rose 3.5 percent to 16.9 billion pounds and the interim dividend was held at 3.1 pence per share.

While like-for-like sales, excluding fuel, increased by just 0.6 percent, the group benefited from delivering £63 million of synergies at Argos ahead of schedule.

Sainsbury's opened 60 Argos stores in its supermarkets in the half, taking the total to 251.

Sainsbury's says can thrive with or without Asda © Getty "The success of the Argos integration shows Coupe and his team are able to spot M&A opportunities and execute them well," said Hargreaves Lansdown analyst Laith Khalaf.

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To pull off his Asda coup, Sainsbury ’ s boss Mike Coupe desperately needs to sell the supermarket mega-merger as a win for the consumer. His “great deal for everyone” will create a monster that the Competition & Market’s Authority is almost bound to take a chunk out of just to prove that it still exists.

From fears about job losses to a view of two businesses trying to ‘future-proof themselves’.

Sainsbury's said the outlook for British consumers was uncertain heading into Christmas.

"The grocery, general merchandise and clothing markets continue to be highly competitive and very promotional," it said, echoing comments from Marks & Spencer on Wednesday.

However, Sainsbury's said it remained on track to meet analysts' average pretax profit forecast for its 2018-19 year of £634 million, up from £589 million made in 2017-18.

Watch: Sainsbury's CFO Says He's Pleased With 1H Performance of Food Business (Bloomberg)

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