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Report: Sainsbury's, Asda to detail price cuts to win merger approval

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Report: Sainsbury's, Asda to detail price cuts to win merger approval

U.K. supermarket chains J Sainsbury PLC and Asda Stores Ltd. will detail a more specific commitment to price cuts in a bid to secure the approval of Britain's Competition and Markets Authority on their planned merger, the Financial Times reported, citing people briefed on the process.

When the deal was announced, the companies said they expect to lower the prices of items shoppers buy regularly by at least 10% but they did not specify how many or which products. In their new submission to the CMA, the grocers plan to publicly disclose a commitment to annual savings for customers, according to the FT.

The figure was reportedly previously supplied to the CMA but redacted from its report.

The retailers also intend to submit a counterproposal for store disposals following a recalculation of a key indicator of consumer harm using what they describe as more realistic criteria, the report said. Analysts previously estimated that the grocers need to off-load between 100 and 150 stores, the newspaper added.

In February, the competition watchdog warned the grocers that it could block the proposed merger after ruling that the move would result in higher prices and a poorer shopping experience, among other findings.

More recently, Sainsbury's and Walmart Inc.-owned Asda were reported to have made a counterclaim against the CMA's provisional findings, arguing that the regulator erred in its assessment of the retailers' store networks.