An Unlikely Marriage
Asda and Sainsbury’s shoppers react to walking down the aisle together.
With Love Island currently taking over our TVs, we are getting used to seeing relationships between unlikely couples forming overnight, with rivalries turning into alliances, and competitors partnering for survival. And yet it was still with some surprise that we read about the proposed merger between Asda and Sainsbury’s back in May, proving that some partnerships still have the ability to shock. Just like Orwell’s 1984, Eurasia and Oceania flit from enemies to allies in the blink of an eye.
As experts began trying to unpick the details and to make sense of this surprising alliance, UK consumers watched on with intrigue. It certainly didn’t go unnoticed. Our research tells us that 9 in 10 consumers had heard the news within days of the announcement, and the speculation about the possible implications created instant uncertainty.
For most, if not all respondents, the merger of the two supermarkets felt like a strange fit. Asda is known for its everyday low prices, whereas Sainsbury’s has a reputation for quality. In consumers’ minds, the two supermarkets cater for very different types of shoppers and they expressed concerns around how the merger will cater to existing customers of both grocers.
There was a real concern that a middle road would be taken that would be unsatisfactory to both sides. Asda shoppers main concern was prices, believing that Sainsbury’s higher prices will magnetically pull up the average basket price at Asda. This was particularly concerning for branded products, with Asda’s price match guarantee a major draw for their loyal shoppers.
Sainsbury’s shoppers were worried that the merger could have a negative impact on the quality of the own brand range, even going so far as to raise concerns about the impact on food standards and animal welfare. One shopper characteristically told us “Cheaper products is always a welcome, but quality must come first, and I hope Sainsburys will remain as good as it has been”.
Like any marriage between two contrasting establishments, it is often the relatives, or in this case us the shoppers, who are most concerned about how the two families will fit together. Both our Sainsbury’s and Asda respondents were quite candid in telling us that they considered themselves as very different types of customer, and neither were keen on ‘walking the aisle’ with the in-laws. One of our respondents bluntly summed it up by commenting: “Do Asda shoppers really want to shop at overpriced, snobby Sainsbury’s? Do the snobby Sainsbury’s shoppers want to slum it at Asda?”.
Concerns also extended beyond respondent’s personal realm and into wider aspects of society such as farmers welfare, local shops and the future of the high street. “They will take over! The farmers, butchers, bakers, small shops will all suffer”. We also heard concerns about store closures, a potential loss of jobs and a decrease in competition causing an increase in customer vulnerability, “I fear that the potential lack of competition available across the supermarket arena will allow this merger to monopolise the market and make the consumer vulnerable.”
But not all hope is lost, there may still be a path towards to a happy ending. Both sets of shoppers were excited about the possibilities such as access to new products and potentially new categories and services… “It may result in a wider variety of products at both shops – currently, there are some items I buy at Sainsburys, while for others I have to go to ASDA, and so if there was a merging of stores it may mean that there would be better product availability”. Will there be new and improved loyalty schemes, cheaper petrol, improved online services? Is it possible that a utopia can be achieved where Asda’s prices meet Sainsbury’s quality, and everyone wins? For this we may have to wait and see.