Consolidation continues to be on trend as yet more giants, this time Sainsbury’s and Asda, come together to create a mammoth grocery, general merchandise and clothing retail group with a combined revenue of £51bn. And let’s not forget about the 630 or so service stations they have between them, meaning they will collectively hold a 17.9% share of the fuel market. Imagine the impact that could have if the Asda approach to leading fuel prices down is rolled out across the Sainsbury’s network too.
PRA chairman Brian Madderson sounded pretty glum as he suggested that the deal is likely to go through without too much bother as both networks are fairly complementary, and the Competition and Markets Authority (CMA) would only look at mergers/acquisitions with a consumer detriment focus. It would be hard to argue any detriment, especially if the merger results in better fuel buying and lower pump prices.
Meanwhile, a more positive reaction on the effect of combining the networks of those other forecourt giants, MFG and MRH (see Property Insight, page 23). Adam Wadlow of property advisers Barber Wadlow believes the deal is good news for everyone in the sector, showing how sophisticated the market has become and raising the profile of the market as a whole. Forecourt property prices should hold steady he believes, as demand continues to outstrip supply, and trading conditions remain robust.
Moving on, and interesting news from Bosch this month (see news page 4 and website). The company’s CEO has reported a major breakthrough in diesel technology the reduction of emissions of nitrogen oxides (NOx) so drastically that they already comply with future limits. "Diesel can now resume its success story," he claims. But is it too late? The momentum seems to have swung so far away from diesel, with plummeting sales of new diesel-engined vehicles, despite their greatly improved efficiency and emissions. Is no one listening to the facts? There was also news last month of leaked government proposals suggesting a clampdown on hybrids that don’t do at least 50 miles on electricity alone. That would be just about all of today’s models!