The bidding battle for the Safeway chain is being closely watched in the Irish Republic, with industry sources predicting the outcome could lead to a new retail chain entering their market.
A key factor in the equation is Safeway's 12 stores in Northern Ireland. If the Sainsbury bid were to succeed, they would be added to its seven Northern Ireland stores, making it a major player in the area and providing a platform for expansion.
Sainsbury has examined the market opportunities in the Republic, even looking at a possible site in the Dublin area. One of the main reasons it has held back, according to trade sources, has been the dominance of Tesco.
Safeway's other suitor, Wal-Mart, is frequently touted as a potential purchaser of Tesco's leading Irish competitor Dunnes. Analysts suggest that were Wal-Mart to win the Safeway battle, it is unlikely to restrict its Irish presence to a dozen stores north of the border.

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