A MERGER between Asda and Sainsbury’s to create a giant that would dominate the retailing landscape raises many questions that go beyond business considerations of economies of scale or market share.
They concern fundamental issues about the way Britain now shops, and what the future holds for both the traditional high-street and independent retailers who give it its character and do so much to foster community spirit.
The competition authorities will need to look long and hard at the proposed merger, which would at a stroke eclipse Tesco’s long-held dominance of grocery shopping. But they should also address the wider questions of what it means to the whole retail sector.
It is possible that consumers will dislike the idea of being pushed towards an even smaller handful of retail giants than exists now, and turn instead to their local independents, which would be a welcome boost for them. But equally, in an age where austerity still holds sway over many household budgets, shoppers may have no realistic choice but to opt for lower supermarket prices.
The Government needs to view the Asda-Sainsbury’s deal in the context of a radically changing retail landscape, where online companies like Amazon can undercut shops because they have fewer overheads, both in terms of properties and staff.
This undoubtedly reduces prices, but at the cost of hollowing out traditional shopping streets and leaving once-thriving market towns and their communities a shadow of their former selves. And that is too high a price to pay.