First there was private equity, then talk emerged that Marks and Spencer was considering purchasing Sainsbury. Now the rumour mill has ground out talk that Asda has mooted throwing its hat into the ring.
If the two supermarkets were to merge, they would have a combined market share that is comparable to Tesco’s.
Clearly competition authorities are likely to raise their eyebrows at such a merger, but given that the resulting company will be no bigger than Tesco, can they really stop it? Rumour says Asda is discussing the possibility with the Office of Fair Trading.
When Morrison and Safeway merged, Morrison was forced to sell off some of the Safeway stores, with Waitrose seeming to be the main beneficiary.
Asda is, of course, owned by Wal-mart. Its parent company has deep pockets, but is suffering in the US, where it is so large it has limited scope for expansion. It even has a problem in the recruitment field, since a high percent of would-be potential employees have already worked for the company in the past.
But, while the line-up of suitors grows, Sainsbury itself continues its renaissance. It is now two thirds of the way thought its three-year recovery programme.
In the 12 weeks to March 24 like-for-like sales were up 5.9 percent, while chief exec Justin King reckons the company has now added £1.8 billion to turnover, thanks to the recovery programme.
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