Physical retail mammoth Walmart has announced that Sainsbury – the second largest chain of supermarkets in the UK – and ASDA, a Walmart-owned subsidiary brand, will work together to form one of United Kingdom’s leading clothing and general merchandise groups.
Markedly, Tesco is currently the largest retailer in the UK and with over 3,000 outlets.
The move has been made to enable both the brands enhance their current customer base and attract new ones. It, apparently, also reflects the refocusing of Walmart’s global operations, out of the USA and its other existing markets.
This combination will reportedly bring two completely different customer propositions which will create a more efficient competitive, adaptable and resilient business that will offer better pricing, quality and a varied range of products for consumers to shop from.
Speaking on the merger, Doug Mcmillon, Walmart’s president and CEO said that the retail giant believes that the combination will provide the consumers with a unique and thrilling opportunity.
Adding on, Doug said that Walmart has benefited from working in the UK and now it will plan to work with Sainsbury in order to reach the goals of this merger.
Post the merger, Walmart will get 42 per cent of the sharing capital of the combined business. Also, under the terms, Walmart will be paid £ 2.975 billion. This will likely fuel the retailer’s investments in digital and other international operations – just as it is reportedly planning to buy stake in Indian e-commerce company Flipkart for US $ 12 billion.
Markedly, Walmart has operated under a strategic alliance with JD.com in China since 2016, and last month, it opened first small, high-tech supermarket in the country, in Shenzhen.
