BOSSES of Sainsbury’s and Asda insist they plan to keep both stores open in Keighley following the companies’ planned merger. But in a top-level discussion with Keighley MP John Grogan they admitted they might be forced to close one of the stores to avoid breaching competition rules. Mr Grogan quizzed Roger Burnley and Mike Coupe, the chief executives of Asda and Sainsbury’s, during a recent session of the Parliamentary Select Committee on the Environment, Food and Rural Affairs. He sought reassurances about the future of the two local stores – which lie on either side of the railway track in central Keighley – and terms and conditions for staff across the country.
Speaking to the Keighley News, Mr Grogan said afterwards: “My overall conclusion is that having questioned both supermarket bosses I think it is not in the interest of either their staff in Keighley or local consumers that the merger goes ahead.
“Both CEOs admit that the Competition and Markets Authority may insist that if they merge they will have to dispose of one of the two stores in the town, and there may not be a buyer.”
Mr Grogan said it was striking that, during the discussion, neither CEO could say how many towns were like Keighley where both companies had a store.
Later the companies clarified the figure, saying Sainsbury’s currently had 644 supermarkets in the UK, with 138 within one mile of an Asda supermarket.
During the meeting, Mr Burnley said: “We strongly want both brands to continue being open on every single site.”
But he admitted the Competition and Markets Authority might force the newly merged company to close one or the other store in towns such as Keighley, where they were close together.
Mr Grogan questioned the CEOs on their claims that an Asda-Sainsbury’s merger would not create a duopoly in the UK grocery market.
The bosses responded that the grocery market was “widening and widening”, with conventional supermarkets joined in recent years by the likes of B&M, Home Bargains and Marks & Spencer.
Mr Burnley said: “Who would have thought even five years ago we would be competing with the taxi business for your food tonight? But we are, with Uber.”
During the meeting the parties discussed the two separate sets of terms and conditions that apply to Asda and Sainsbury’s staff.
Mr Grogan said he understood Asda workers were paid “a bit less” than Sainsbury’s.
He said: “It could be £100 million if you are going to put the two together and pay Asda workers the same as Sainsbury’s. It is quite a lot of money.
“There will be pressure from the trade unions, perhaps legitimate pressure. Why should they not get the same?”
Mr Burnley responded that the companies were two separate brands, with different elements to their business models. “For example, we have high volumes, so we have a nightshift and a lot more stores in our model.
“I cannot envisage a world in the future where there is a vast disparity between the two sets of terms and conditions, but that is something we will deal with.
“We are on a journey anyway, so we have our latest contract, around which we have been in discussion with unions and with our colleagues for the last 18 months.”
Mr Burnley said he was “absolutely unequivocal” that the companies would keep their separate head offices. He added: “Asda’s base will absolutely be in Yorkshire. We are proud of our Yorkshire heritage.”
Mr Burnley said that following a merger he could not see how either company could make savings by closing distribution centres, because they were all used to full capacity.
He said: “UK grocery logistics is the best in the world. We are all extremely efficient, and Asda and Sainsbury’s logistics are very efficient.”