Kirkcaldy a key test in Asda-Sainsbury merger deal

Sainsbury's in Kirkcaldy
Sainsbury's in Kirkcaldy

Kirkcaldy could be one of the key towns in a UK-wide study into the impact of a proposed merger of Asda and Sainsbury.

It is feared it could become a ‘‘monopoly town’’ if the massive retail plan is given the go-ahead.

Lesley Laird MP (Pic: George McLuskie)

Lesley Laird MP (Pic: George McLuskie)

That is one of the issues which the Competition and Markets Authority (CMA) will consider as it scrutinises Sainsbury’s bid to take over Asda in a £7.3bn deal.

In Kirkcaldy, the duo dominate with almost 50 per cent of the market with a huge turnover.

In 2015, it was estimated to be almost two to three times the turnover of the Tesco store in Hunter Street.

Kirkcaldy is still recovering from the ‘Tesco effect’ which saw footfall decimated by the store’s closure, and the ripples felt throughout the town centre.

Torquay, Paignton, Lancaster, and Brighton are said to be in a similar situation with regard to becoming ‘‘monopoly towns’’ if this massive deal goes ahead – sparking concern among MPs who want the CMA to consider the potential impact on communities.

Lesley Laird, MP for Kirkcaldy and Cowdenbeath, fears the deal could squeeze competition, and any price cuts at the tills may not be entirely good news or sustainable.

She said the proposed deal “resents a number of key concerns for Kirkcaldy.’’

She said: “Sainsbury’s and ASDA already enjoy approximately 50 per cent of supermarket custom here in Kirkcaldy and this merger is a concern given its potential to squeeze local competitors.

“We’ve heard there will be no store closures, but that’s not legally binding for the long-term and we’ve heard no assurances that the deal won’t result in job losses, changes to pay, terms and conditions.

“There’s no doubt such a big brand duopoly would result in never-before-seen bargaining power which could potentially bring prices down for consumers.

“But at whose expense? Suppliers, farmers and manufacturers are operating in an incredibly tough retail market as it is.

“With the growth and development of on-line supermarket retailers this squeeze across the retail sector and supply chain is only likely to intensify.

“Conversely, the deal could limit consumer choice and actually lead to higher product prices in the long term.

“It’s a highly uncertain situation and presents a number of key concerns for Kirkcaldy which the Competition and Markets Authority must fully investigate.”

The regulator is expected to begin its work in the next few weeks.