Sainsbury’s £7.3bn merger with Asda could lead to increased wholesale prices, industry experts claim.
Mike Coupe, Sainsbury’s chief executive, has claimed that the deal will lower prices of everyday items available in both supermarkets by 10%.
But James Brown, head of retail and consumer goods practice at pricing analyst Simon-Kucher, told Better Wholesaling’s partner publication RN that wholesale pricing could consequently rise. “Suppliers’ prices will be driven down, but if they object they risk removing themselves from the majority of the market,” he said.
“Added to this, suppliers won’t want to pass the added costs directly to customers and may consider recouping them elsewhere, such as through increased wholesale pricing.”