Sainsbury’s proposed merger with Asda is almost certain to come under scrutiny from the competition watchdog amid concerns over how it could restrict consumer choice.

The combination of Britain’s second- and third-largest grocers would boast a portfolio of 2,800 stores across the UK (including Argos), should the enlarged group be allowed to maintain their current estates.

Sainsbury’s boss Mike Coupe has insisted there will be no store closures as part of the landmark deal and told the City that the two grocery giants operate in “complementary” geographies.

“Sainsbury’s is strong in the Southeast of England and Northern Ireland, Asda is strong in the North, Wales and Scotland,” Coupe said on Monday.

“Although there are overlaps, there are high levels of complementarity in the overall store portfolios.”

The Sainsbury’s supremo did concede, however, that the Competition and Markets Authority (CMA) could demand some store disposals – and the two retailers have asked the CMA to fast-track its inevitable probe to a phase-two investigation.

When that begins, the CMA will look at competition on a hyper-local basis to assess whether consumers in certain counties, towns and cities will suffer from a lack of choice – or be faced with the potential of paying higher prices – were the deal to progress without remedies.

But in what regions of the UK is the CMA likely to be focusing its attention?

Asda’s store estate map

Source: Harper Dennis Hobbs

Sainsbury’s store estate map

Source: Harper Dennis Hobbs

Asda and Sainsbury’s store estates in full

LocationAsda storesSainsbury’s stores (including Local)Sainsbury’s stores (excluding Local)
Aberdeenshire 3 1 0
Angus 2 0 0
Ayrshire and Arran 6 1 1
Bedfordshire 3 7 5
Berkshire 3 11 6
Bristol 2 13 5
Buckinghamshire 6 16 8
Cambridgeshire 4 8 8
Cheshire 11 21 12
City of London 0 0 0
City of Aberdeen 4 11 2
City of Dundee 3 1 1
City of Edinburgh 3 27 6
City of Glasgow 5 23 6
Clackmannan 1 0 0
Clwyd 7 5 3
Cornwall 5 7 7
Cumbria 7 4 3
Derbyshire 5 21 9
Devon 6 18 12
Dorset 6 15 9
Dumfries 0 1 0
Dunbartonshire 5 2 2
Durham 10 22 4
Dyfed 2 2 2
East Lothian 2 0 0
East Riding of Yorkshire 8 23 3
East Sussex 5 10 6
Essex 14 24 12
Fife 5 3 1
Gloucestershire 6 17 11
Greater London 39 327 92
Greater Manchester 45 41 17
Gwent 7 5 3
Gwynedd 5 0 0
Hampshire 12 37 21
Herefordshire 1 1 1
Hertfordshire 7 23 17
Inverness 1 0 0
Isle of Wight 1 4 2
Kent 15 31 19
Kincardineshire 1 0 0
Lanarkshire 6 5 4
Lancashire 17 22 13
Leicestershire 7 10 5
Lincolnshire 8 12 9
Merseyside 18 21 8
Mid Glamorgan 6 2 2
Midlothian 1 2 1
Moray 1 0 0
Nairn 0 1 1
Norfolk 5 12 10
North Yorkshire 10 49 15
Northamptonshire 7 7 5
Northumberland 5 5 4
Nottinghamshire 13 30 6
Oxfordshire 3 19 11
Perth and Kinross 1 3 1
Renfrewshire 3 3 0
Ross and Cromarty 1 0 0
Roxburgh, Ettrick and Lauderdale 1 3 2
Shropshire 4 6 4
Somerset 8 14 10
South Glamorgan 5 12 3
South Yorkshire 26 30 6
Staffordshire 14 11 8
Stirling and Falkirk 3 4 3
Suffolk 6 2 2
Surrey 3 23 16
Tweeddale 0 1 1
Tyne and Wear 20 23 7
Warwickshire 3 10 5
West Glamorgan 3 4 2
West Lothian 2 2 2
West Midlands 31 33 17
West Sussex 4 16 11
West Yorkshire 28 55 18
Wigtown 0 1 1
Wiltshire 4 13 11
Worcestershire 5 8 4

Data from commercial property agency Harper Dennis Hobbs (HDH), shared exclusively with Retail Week, reveals that the two grocers have a very similar presence in counties including the West Midlands, South Yorkshire, Greater Manchester, Staffordshire, Tyne and Wear, Lancashire and Merseyside.

However, Coupe’s claim that Sainsbury’s is stronger in London and the Southeast certainly rings true.

In Greater London, for example, Asda operates just 39 stores, according to the HDH data, while Sainsbury’s has 92 supermarkets and a further 235 convenience stores.

The CMA’s criteria when running the rule over deals of this nature includes assessing how many stores are located within a 12-and-a-half-minute drive of each other.

HDH suggests that 951 of Sainsbury’s 1,265 grocery stores are located within two miles of an Asda, with 299 of those sitting within just one mile of an Asda.

Radius size (miles)Sainsbury’s stores (including Local c-stores) near Asda
0.25 35
0.5 100
0.75 186
1 299
1.5 572
2 951

However, when you strip out the impact of convenience stores – an arena that Asda doesn’t compete in – only 350 of Sainsbury’s larger supermarkets are situated within two miles of an Asda store.

An even smaller number of Sainsbury’s bigger sheds – 131 – are located within one mile of an Asda.

But it is these overlaps – and the surrounding competition in those localities – that are likely to face the most intense scrutiny from the CMA.

Radius size (miles)Sainsbury’s stores (excluding Local c-stores) near Asda
0.25 28
0.5 61
0.75 91
1 131
1.5 231
2 350

HDH head of retail consultancy Jonathan De Mello insists that the geographical overlaps will “inevitably” result in closures and a reduction in staff headcount across the two supermarket giants.

He tells Retail Week: “The merger between Sainsbury’s and Asda – despite assertions by the business that consolidation will not happen – will inevitably lead to store closures and consequent job losses.

“An average Asda or Sainsbury’s main-line store employs circa 200 people – job losses from store closures could therefore be substantial”

Jonathan De Mello, Harper Dennis Hobbs

“We have calculated that there are 951 Sainsbury’s stores within two miles of an Asda. Given this, the CMA would be forced to act to prevent monopoly positions for the combined business in many of these towns – leading to a forced sale of stores.

“An average Asda or Sainsbury’s main-line store employs circa 200 people – job losses from store closures could therefore be substantial.”

De Mello fears for the future of the out-of-town locations in which many of the overlaps occur across the Sainsbury’s and Asda portfolios.

While he believes any high street sites that the CMA demands are offloaded would quickly find new tenants or alternate uses, those in less desirable locations would struggle.

“A lot of this vacated space would essentially become redundant and would have to be repurposed,” De Mello says.

“The high street stores could potentially be turned to other uses, such as residential and leisure, but many of the standalone out-of-town stores where overlap exists would have to be knocked down if they closed, as competitors such as Tesco already have a considerable presence in these locations, and would be unlikely to take many of the stores as a result.

Aldi and Lidl could take some stores, but many of them are larger than their typical desired footprint.”