When Four Become Three…

When Four Become Three…

Sainsbury’s and Asda have announced their merger, and two of the biggest retail giants in the UK are set to become one – leaping to claim Tesco’s crown for the largest market share. Whilst mergers are often delicate and tricky affairs, the Sainsbury-Asda has offered a textbook answer of how to keep your customers and staff happy. Promises of no store closures, no in-store staff redundancies and lower prices for their customers have kept shoppers and investors happy alike, with Sainsbury’s shares jumping 10% once the news broke.

It may surprise you, but it’s actually great news for innovation. Whilst variety and NPD is dependent on diversity, competition, and new ideas – all of which are best served by smaller companies – this merger will foster collaboration and competition of the best sort, rather than forcing both companies to engage in a vicious price war to win customers, driving innovation out the door. They’ll be able to offer a greater breadth of products, appealing to a wider range of customers – which is only good news for innovation!

Far from homogenising the market, the merger should be able to encourage both Asda and Sainsbury’s to develop their own unique niches in the grocery sector. Asda has had considerable success at Product of the Year, with an incredible 7 winners in 2018, so they’re no strangers to top notch innovation – but we’re sure that as they clinch Tesco’s title they’ll want to keep pushing exciting new NPD. This will encourage other retailers to step up the game by offering exciting new products to inspire their customers!

So, although full details of the merger have yet to be confirmed, I confess to being quietly confident. There’s a full summer’s worth of innovation to be excited about, and I’m looking forward to it.