Where next for Asda and Sainsbury's?

CMA block  merger  > Extensive competition concerns

  • Supermarkets: Over 500 stores overlap -  c.50% of the supermarket portfolio

  • Disposals unlikely to address concerns - neither suitable purchaser nor a package of assets could be found

  • Discounters not an effective alternative to one-stop supermarkets

  • Online: Only three operators (Tesco, Sainsbury’s, Asda) has national presence via store pick model

  • Pure online players (Ocado, Amazon) limit services to certain parts of the UK Entry or expansion by pure online players unlikely to offset competition concerns

  • Fuel:635 PFS operated with 18% market share >  120 sites overlap with a lack of local competition

Our view


  • Refocus on cost-cutting and improve pricing

  • Deeper integration of Argos into store network

  • Fresh investment in stores and online distribution


  • Seek an alternative buyer

  • Private equity - quick exit option but not strategic

  • Spin-off to European grocer possible, attracted by Asda’s UK market foothold

  • Walmart strategic tie-up 

  • Target for Amazon?

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Telephone: +44 20 3790 8087,  Email: ir@atratocapital.com


Supermarket Income REIT plc is listed on the London Stock Exchange. SUPR acquires UK supermarket sites that form a key part of the future model of grocery in the United Kingdom. SUPR aims to provide long-term inflation-linked income, from institutional grade tenants and the potential for capital growth through active asset management. Atrato Capital is the Company's Investment Adviser.


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Supermarket Income REIT Plc is a proud member of the Association of Investment Companies implementing the principles and recommendations of the AIC’s Code of Corporate Governance.

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