In a move that’s been the subject of much analysis and speculation, it was announced this month that Sainsburys and Asda have agreed on plans to merge. If approved by the CMA, the £12 billion merger deal will result in one third of the UK’s entire supermarket purchases being from one of their 2800-strong store count. The companies in question are clearly delighted- with Sainsburys CEO Mike Coupe even breaking into song on the day of the announcement, much to his PR Agents bemusement we’re sure.
But this gleeful response and the vague accompanying promise that the marriage will result in “a great deal for everyone” hasn’t exactly instilled reassurance in the proposal’s sceptics. And quite rightly so- the consequences of this ‘mega-merger’ will be far-reaching for both employees and consumers. The decision by Walmart and Sainsburys has been seen as a direct reaction to the encroaching of competition upon their market share- more specifically that of multi-channel retailer Amazon and the increasing growth of affordable German outlets Aldi and Lidl. A lot of talk about this move has been grocery-centric, but what implications might it have for the UK’s pharmaceutical and optometry landscape?
Sainsburys is no stranger to its business changing hands- selling off its entire pharmacy business to Celesio UK under the Lloyds banner in 2016. Since then funding cuts have resulted in the planned closure and divestment of almost 200 stores, and the lack of investment in community https://nizagara-online.net pharmacy has been a topic of much passionate and necessary debate. The opening of 14 Specsavers branches within several Sainsburys stores has been less publicised, but nonetheless signifies a clear desire within Sainsburys to cross-pollinate, and to cement its reputation as an all-encompassing and community-active outlet that offers more than grating celebrity chef endorsements.
Walmart/Asda have been less collaborative, and consequently their health-related services are perhaps less well-known to the average high street consumer. Neither company demands anywhere near the share of both pharmacy and optometry industries that the market leaders occupy, with Boots accounting for over 30% of the pharmacy industry and Specsavers almost 40% of optometry. But with over 250 pharmacies in both Asda and Sainsburys across the UK, and what Mintel’s Senior Retail Analyst Jane Westgarth observes as the “steady growth” of Asda’s optometry division, the merger is pushing us to ask- will these in-store services be affected? According to trade union Unite, uncertainty amongst the Sainsburys workforce seems nothing new, and retail analyst Natalie Berg has predicted that store closures will be necessary if the CMA are to give the merger the go-ahead, and that the move does not address the ‘structural change’ needed to survive in an increasingly online-based market.
The duplication of services certainly seems a concern- although this may be more of an issue within the administration and head office-based roles that will almost certainly face consolidation. However, Bloomberg observes that based on previous decisions held by the CMA, any Sainsburys within a 15 minute drive of an Asda (and vice versa) will potentially come under scrutiny. But the nature of online purchasing differs greatly between grocery shopping and health related goods- with customer service and face-to-face care at the heart of the pharmacy and optician experience. Though ‘telemedicine’ may be on the rise, a Lloyds Bank survey has shown that pharmacists are becoming less pessimistic about their careers future, whilst Mintel notes that the high desire to ‘try before you buy’ means it’s unlikely buying glasses sight unseen (ahem) online will overtake high store purchases and their preceding check-ups. Reassurance is a huge part of any health-related diagnosis or purchase- the kind only qualified and caring professionals can give, and this is not a need that can be sated by an online storefront.
All in all, there are certainly more questions than answers at present, and both Asda and Sainsburys are likely to remain tight-lipped until the merger is given the green light (maybe just the occasional sing-song behind closed doors?). The healthcare industry is an ever-changing landscape like any other, and it would seem that building one’s professional skills with mobility in mind is as sound a tactic as any. The stimuli for this merge are equally influential on the future state of healthcare, not to mention the ongoing Brexit negotiations. Perhaps the overlap of other services, which may put them in the firing line come crunch time, does not apply to pharmacies and opticians- their services are too vital to ensuring a happy, healthy community. But when two giants become one for the sake of future-proofing, one must wonder what the collateral damage will be.