We have seen thousands of job losses because of the price squeeze
Sainsbury is more famous among affluent customer
Discount grocers made the business for the supermarkets even tougher and now these supermarkets have started to respond. J Sainsbury and Walmart agreed to merge together to fight the intense competition in the market. Of course, it is Walmart which hold the biggest shareholder position in the combined entity.
With this merger, the combined entity would not only be in a better position to fight the German discounters such as ALDI and Lidl but also Amazon’s recent move in the grocery space. The entity’s combined value of £5.9 billion also threatens the UK’s largest market shareholder firm in this space called Tesco, which is far larger than the Teso Plc.
The clear benefits of combining the two firms appear in the scale benefit arena, however, the question which will remain unanswered is if the combined entity is going to take on discount hunters.
In the supper market space, we have seen thousands of job losses because of the price squeeze. In order to achieve the most efficient model, both brands have to come up with a strategy under which they are not focusing on their own brand advertisement. Remember that Sainsbury is more famous among affluent customers and it has the second biggest shareholding in the market. Asda, part of Walmart group, has a stronghold in North of England and the shoppers in Asda are on a more tighter budget.
Tesco has certainly changed its game after restructuring and one can see the signs of recovery and with a combined entity – Sainsbury and Walmart, the combined retailer would help it with greater clout with the supplier
