A health and beauty joint venture between UK supermarket Sainsbury’s and UK health and beauty chain Boots may be abandoned in order for Sainsbury’s to focus on the bidding war for Safeway.
The two companies have been testing a joint venture whereby Boots takes over the whole health and beauty range in large, out-of-town Sainsbury’s stores. Trials have taken place in nine stores since October 2001.
Both companies have become frustrated over the trial’s progress. Both the chairman and chief executive of Boots are leaving, which has delayed decision-making and made forward planning difficult, reported the Independent.
Another obstruction the venture faces is a submission to the Office of Fair Trading. A retail analyst told the paper: “I don’t think the OFT would have been terribly keen to see Boots’ market share of around 33 per cent added to Sainsbury’s share. The deal would also have removed Sainsbury’s as a competitor.”
While Sainsbury’s concentrates on a bid for Safeway, its joint venture with Boots may no longer be a priority. Sainsbury’s said it is still in discussions with Boots.