MPs have written to the Competition and Markets Authority (CMA) requesting more information about its proposed scrutiny of the Sainsbury’s/Asda deal, the Financial Times (£), The Times (£) and most other news outlets report. They expressed worries about the impact of the deal on the competitiveness of suppliers and on consumer choice in particular locations. They asked five questions about the timing, length and scope of the probe and for an explanation of the criteria the CMA would use to determine an acceptable distance between stores belonging to the new combined business, as well as the tests that would be used to decide whether there should be disposals to competitors or other companies. The Daily Telegraph says the letter was signed off by MPs on two parliamentary committees – the Business, Energy and Industrial Strategy and the Environment, Food and Rural Affairs committees. Neil Parish MP, chair of the environment committee, wrote: “I am concerned that with two supermarkets [Tesco and the merged Sainsbury’s/Asda] taking up around 60 per cent of the market, suppliers would be more reluctant to raise complaints about unfair practices.” Business committee chair Rachel Reeves MP said: “The CMA needs to be a champion of consumers and must look closely at the impact of this merger on the supply chain as well as the effect on competition”, The Daily Mail. The Guardian says the CMA has already said it is likely to review Sainsbury’s deal with Asda but declined to comment in advance of an inquiry opening.
A CMA “no” to a combined Asda/Sainsbury’s will see shoppers pay the price, The Daily Telegraph reckons. Shadow business secretary Rebecca Long-Bailey claimed in a Radio 4 interview the deal risked suppliers being squeezed, workers laid off and shoppers facing high price – all at the same time.
The Times (£) is upbeat for Sainsbury’s shares and rates them a “buy” noting that with improving profits and at least a year or more before “Sasda” happens, there are share price gains to be had.
An opinion piece in The Daily Mail states the obvious – “Sainsbury-Asda deal would create a supermarket Goliath capable of dictating prices”. The article concludes consumers, suppliers and staff will end up bearing the costs.
What is a supermarket, asks The Times (£) in an opinion piece which wonders whether the industry that the CMA will investigate is about to be disrupted by a new entrant from Silicon Valley, pointing out that the laws that determine our approach to monopolies date back decades, and in the case of the US, more than a century.
Morrisons chairman Andrew Higginson, a former executive of Tesco, has branded Philip Clarke, the former Tesco chief executive as an alleged “bully” who presided over “a really shameful period in the company history” – citing “personal character flaws”. Higginson described what happened at Tesco as “an extraordinary act of corporate vandalism”. Clarke only lasted three years in the top job after working at Tesco for most of his life. The Times (£) said it asked Clarke to respond to the allegations but he did not reply.
Disruptive checks at ports could create a shortage of food staples and they could even disappear from supermarket shelves after the UK leaves the European Union, Eurotunnel and freight industry bosses have warned, reports The Guardian.
Lidl is selling locally grown cannabis to Swiss shoppers in the form of two products derived from hemp flowers as an alternative to rolling tobacco, reports The Guardian. Lidl’s products are designed to provide a relaxing and anti-inflammatory effect, but not to be intoxicating, the newspaper says. The report points out that Switzerland changed the law in 2011 to permit over-18s to buy and use cannabis containing no more than 1% of tetrahydrocannabinol, the plant’s principal psychoactive constituent. Swiss supermarket chain Coop - unrelated to the UK brand - was the first to sell cannabis cigarettes last year.
Kellogg’s has been making hay by moving into healthier eating with first-quarter sales up 4.7% to $3.4bn (£2.5bn) – ahead of Wall Street forecasts of $3.3bn, the Financial Times (£). Net income was $444m, which was also ahead market expectations. The US morning foods division saw sales fall 2.4% to $691m but its North American “Other Unit” which operates brands such as RXBar and Kashi Organic posted sales up 22% to $479m.
Scandal-hit 2 Sisters’ losses have mushroomed 80% from £7.7m to £38m after it was hit by one-off costs of £11.2m, documents filed at Companies House, show, The Daily Mail. Turnover rose from £989m to £1.1bn in the year to 29 July.
Weight Watchers shares surged 7% in after-hours trading to $74.5 after the Oprah Winfrey-backed company said revenues grew 24% from a year ago to $408.2m, ahead of analyst expectations of $388.5m, the Financial Times (£). Net income climbed from $10.7m to $39.1m.
Insolvency consultancy Begbies Traynor reports the number of retailers in significant financial distress has increased by a fifth over the past year, with almost 50,000 companies struggling to stay afloat, The Times (£) Are bricks-and-mortar store passé in the era of online shopping, asks the Financial Times (£) in a special report. It says it is traditional to blame Amazon for the increasing suggestion that stores are becoming obsolete. It says shopping for some is a chore and the idea of having to sue up free time to wander around a sterile, overly lit cavern does not appeal.
Shaun Wills has been appointed interim finance director for Marks & Spencer’s clothing and home business, according to his LinkedIn profile, The Times (£). Wills was forced to leave Superdry, where he was chief financial officer in February 2015 when he was declared bankrupt, which was annulled in April of that same year after which he took charge of finance at Jacques Vert.
The Independent reports on social enterprise Well Grounded, which has partnerships with more than 40 employers, form specialist coffee shops and small independents to bigger chains and suppliers, to help unemployed people find work in the coffee industry.