Sainsbury’s announced last Saturday (April 28) that it has “agreed terms in relation to a proposed combination of Sainsbury's and Asda Group Limited, a wholly owned subsidiary of Walmart, to create an enlarged business”.

“Our pharmacy offer remains important”

Asked by C+D if this means Asda will follow Sainsbury's lead and sell off its pharmacy business, Asda said this morning that if the merger went ahead, it “will continue to operate as Asda – and our pharmacy offer remains an important part of our customer offer”.

The merger will require approval by the Competition and Markets Authority watchdog, Asda added, “so this is the beginning of a process – nothing will change day-to-day”.

Sainsbury’s sold its 281 pharmacies to Lloydspharmacy for £125 million in 2016. C+D is aware of two of these pharmacies that have since been earmarked for closure as part of the multiple’s decision last year to divest 190 “commercially unviable” branches.

Views on the merger

Asda president and CEO Roger Burnley said the merger “will be great news for Asda customers, allowing us to deliver even lower prices in store and even greater choice”.

“Asda will continue to be Asda, but by coming together with Sainsbury's, supported by Walmart, we can further accelerate our existing strategy and make our offer even more compelling and competitive.”

Sainsbury’s said the combined business will “create a dynamic new player in UK retail, with an outstanding breadth of products, delivered through multiple channels”.

The resulting “complementary network” of more than 2,800 Sainsbury's, Asda and Argos – which the supermarket bought in 2016 – stores, along with “several of the UK’s most visited retail websites”, will oversee a combined 47 million customer transactions per week.

“The retail sector is going through significant and rapid change, as customer shopping habits continue to evolve. Bringing Sainsbury's and Asda together will result in a more competitive and more resilient business that will be better able to invest in price, quality, range and the technology to create more flexible ways for customers to shop.”