NEF says 2,500 supply-chain jobs at risk in Sainsbury’s-Asda merger

By agency reporter
May 9, 2018

Up to 2,500 jobs in core super market supply chains could be at risk in the wake of the proposed merger of Sainsbury’s and Asda, analysis by the New Economics Foundation (NEF) has found.

Sainsbury’s have reportedly claimed that the merger could lead to lower prices for consumers of up to 10 per cent. Direct job losses and store closures have been ruled out, but it has been reported that lower consumer prices will be met at least in part through negotiating lower prices with suppliers.

Following these reports, analysts at NEF have looked at the potential impact on jobs in the supply chain of major supermarkets, in the event that either all or some of a 10 per cent price cut is passed on to core suppliers of food products and logistical services. NEF says its analysis shows that a five per cent cut in output for these suppliers could lead to a loss of more than1,200 jobs, while a 10 per cent cut could lead to a loss of up to 2,500 jobs.

The total job losses related to a cut in prices for supermarket suppliers could be higher in reality as these estimates do not cover the total supply chain, or the further impact of lost demand in local economies from reduced spending by companies, employees and their families, which could lead to further business closures and job losses outside of supermarket supply chains.

Alfie Stirling, Head of Economic at the New Economics Foundation, said, “If the proposed merger between Sainsbury’s and Asda is allowed to proceed, we are likely to see a classic case of monopoly like power in a market where things are already heavily stacked towards the ‘big guys’.

“This is part of a broader picture, where time and again UK capitalism shows itself to be geared against small business in a way rarely seen in the rest of Western Europe. Small and medium sized firms make up more than 99 per cent of all UK companies, 60 per cent of employment and nearly half of turnover, yet they are repeatedly required to play second fiddle. “

* New Economics Foundation http://neweconomics.org/

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