Asda and Morrisons could launch a joint £2.7bn bid for Safeway.
City bankers told The Observer that Asda was ready to help Morrisons if BHS owner Philip Green makes a counter-bid next month.
Bankers told the paper that Morrisons would be disadvantaged if Green made an all-cash bid because its offer would be in new Morrisons shares. But a link with Asda could provide cash and see off Green.

Meanwhile, the Daily Telegraph reported that Morrisons is on the look out for non-executive directors. Executive chairman of the chain, Sir Ken Morrison, has said he’d rather have “another checkout girl” than a non-executive director, the paper said. And added that any candidates must satisfy Sir Ken’s criteria of “bringing something to the business”.

Asda’s non-food trading director, Andy Bond, told The Mail on Sunday said that its George clothing label would overtake Gap to become the world’s biggest clothing brand within five years.
In the UK George has grown into a £1bn business with a 7% share by volume and 3% by value. The first standalone George store opens in Leeds this week.

Tesco is to go head-to-head with BT with the launch of mobile and fixed line networks, reported The Business.
Tesco will launch a pay-as-you-go mobile service before Christmas, which will combine with the Tesco Talk fixed network service launched last week. The retailer aims to win at least 15% of BT’s 18.6m customers.

Tesco has been ridiculed by rivals for a £60m price cutting campaign, which slashed the cost of Christmas puddings, Christmas cakes and mince pies at the height of summer.
The Sunday Telegraph said that supermarket chain admitted it did not sell many Christmas puddings or cakes in August, but insists the £60m cuts were genuine.