Friday 7 March 2014

Safeway-Albertsons merger as a way back to the UK?

Last night’s NamNews of a merger resulting from demand issues in the US economy could impact UK and EU markets...

The merger continues the consolidation that has changed the US landscape for traditional supermarket operators amid greater competition from upscale chains such as Whole Foods Market, warehouse club operators like Costco and retail giant Walmart.

Apart from the classic understatement by Albertsons chief executive Bob Miller to the effect that the ($60bn) size of the new outfit would improve its bargaining position with suppliers, the real issue is how long it takes for Safeway-Albertsons to seek growth abroad, to compensate for flat-line demand at home?

In which case they would join a trend begun by Walmart-Asda, continuing with Walgreens-Boots, followed by McKesson-Celesio, and who knows, CVS-A.S. Watson in a UK-centric move to Europe…?

And given that Safeway have  been here already, might it be worth considering a Safeway-Albertsons-Morrisons move for starters…?

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