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Former Asda board member: Sainsbury’s merger “treats us as fools”

by LLB Reporter
1st May 18 8:00 am

Former boss hits out

John Maltman, former Asda board member and CEO of e-commerce analytics platform E Fundamentals has hit out at the Sainsbury’s and Asda mega merger.

John has 30+ years working in the retail industry and was responsible for cost cutting during his time on the board at Asda (2004-2005).

He said: “In terms of Sainsbury’s merger with Asda, it is a great pity that the management of two big corporations cannot come up with a better and more constructive idea than a merger. In my view, putting two low growth businesses together doesn’t create a high growth business.  The phrase ‘no store closures as a result of this merger’, ultimately treats us as fools.

“This is a cost play which will impact jobs in warehousing, distribution, stores, headquarters and suppliers. That said, combining Argos with Asda General Merchandise could be one possible source of growth.

“It should take the competition authorities a short time to kick this into touch. It wasn’t so long ago that retailer margins in the UK were amongst the highest in the world. Competitive pressure from outside the top four has brought them down (Discounters, eCommerce). Creating a duopoly with anything like 60% of grocery sales and expecting it to work for customers is wishful thinking. Unfortunately, the “we let the Tesco/Booker merger happen, so we cannot stop this” argument may prevail. 

“So, what next? Competition authorities should block this, not tweak it. Both Sainsbury’s and Asda should be considered acquisition targets. Management of both businesses should get on with creating real growth.”

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