Asda is strongly rumoured to have made a play for Littlewoods and analysts said they expected Tesco would also consider whether to acquire further town centre sites.
One City analyst said: “If Asda does get Littlewoods it would have a huge hunk of space to compete with. There will be other interest in these businesses and I am sure Tesco will take a look.”
Both retailers have been aggressively promoting general merchandise in recent months.
Asda this week announced a £7m photo, jewellery and optical roll-out. It is to add 30 photo centres, 30 jewellery stores and six optical departments to stores this year.
And Tesco is to trial a standalone non-food store.
>>p31 High street, high risk