UK supermarket operator Waitrose will formally request that all bids for fellow retailer Safeway be referred to the competition authorities.
The Financial Times reported that Waitrose, a subsidiary of the John Lewis Partnership, will argue that consolidation would negatively impact consumer choice. Waitrose said at the weekend: “Consumer choice could be diminished and the product range could become very narrowly focused, because of pressure on suppliers to provide goods that are as cheap as possible.”
Waitrose is also concerned that two or more of the major players could mastermind a break-up of the Safeway network of stores, leaving no opportunity for smaller supermarkets to get involved.
Meanwhile the Transport and General Workers’ Union (TGWU) has offered its support to the approach made by Sainsbury’s, saying this scenario offered the best chances of securing employment for its members, 14,000 of whom work at Safeway.
In the meantime, the Consumers’ Association has come out in support of Morrisons’ bid for Safeway, saying that the bid could benefit shoppers by providing a fourth strong player in the UK supermarket sector to sharpen competition. In a lengthy report, the CA insisted bids from other supermarket rivals would have to be referred to the Competition Commission for further scrutiny. The CA report is likely to be given serious weight by the OFT.
Over the weekend the Sunday Times reported that high street retailer Marks & Spencer (M&S) had approached Wal-Mart subsidiary Asda about acquiring some Safeway stores if Asda buys the group.
Asda would sell up to 190 stores if it bought Safeway, at a time when M&S is keen to expand its food operations.
