Lead singer (sorry, CEO), of Sainsbury’s, Mike Coupe apologised for singing ‘We’re in the money’ in between interviews after announcing the merger of his company and Asda.
He said, following the debacle, that it was “an unguarded moment” as he tried to compose himself before a television interview.
“It was an unfortunate choice of song, from the musical 42nd Street which I saw last year and I apologise if I have offended anyone,” Mr Coupe added.
Asked by Channel 4 News whether he will personally be in the money as a result of the merger and what is in it for him, he said: “I am a big shareholder in Sainsbury’s, my shareholding is a matter of public record, you can see how many shares I own.”
Sainsbury’s has agreed to merge with supermarket rival Asda and they claim there will be no stores closed, no jobs lost and prices will go down by 10%. It doesn’t take a genius to conclude that they are either lying, or that suppliers are going to be screwed until the pips hurt.
Whether you like the deal or not — it’s fairly well established that most big mergers destroy value for all but the folk who helped shove it through — there does seem to be a great opportunity to change the way we think about such efforts.
It could represent a superb chance for the new company to be truly different from its rivals, to offer something to the nation that extends beyond fees to bankers and cheaper fruit (the banker fees are guaranteed, the cheaper fruit merely an aspiration).
How about this: in return for us allowing this monster deal and taking the bosses and bankers at their word on the cut-price apples, they make a series of promises that go far beyond the usual platitudes.
This isn’t just any other merger, it’s about food. About the sustenance of life itself. We can only expect them to commit themselves to no store closures or minimal job cuts for so long; circumstances change in retail faster than in many industries.
The beast that is Amazon lurks, ready to destroy any store showing signs of weakness, and the shift to online shopping is plainly not going to be reversed. So, beyond the jobs lost, who cares if some shops shut or change hands?
But there’s one way Sasda or Arsbury’s, could make a truly persuasive case for being a force for good. It could promise that the new company won’t waste any food. None. What is left at the end of the day will be distributed to food charities, at the company’s expense.
Food will be sourced ethically (its mighty buying power will surely mean it can afford to do that and keep prices low). Plastic packaging will be eradicated by, maybe 2020. It could also tell us how many jobs it expects to be done by robots in the future, and tell us at what point the number of robots at work would mean there aren’t enough employed people left who can afford to buy its products (if it hasn’t pondered this yet, why not?).
None of these things come within the remit of the Competition and Markets Authority (CME). Its “Quick Guide to UK Merger Assessment” — being the CMA this is 15 pages long — makes it plain that its sole job is to protect competition. But it has a limited idea of what competition means. Competition to be the best, most decent, most charitable, highest paying, least wasteful supermarket, is not under consideration.
So what does a merged Asda/Sainsbury’s stand for? How about it takes the lead on zero food waste stores, on sustainability? How about it pledges to be responsible for the full life-cycle of the products it sells? That it makes from farm to fork more than just a platitude.
The government could say; you can have your merger, as long as you promise, upon pain of massive fines, to be the best big retailer in the world. To offer a reason to shop there beyond two-for-one deals. To give all staff a stake in the company. To be John Lewis but a lot cheaper.
When Walmart bought Asda back in 1999, it was supposed to transform our food market. To create a giant that would set the tone for the rest. As has been pointed out, Asda is valued under the Sainsbury’s deal at £7.3 billion. That’s only £584 million more than Walmart paid for it 19 years ago.
So the experiment pretty much failed. This one can be a success if the management decide to make it about more than size and cheaper stuff, but about changing the way we shop and eat. And what we do with the by-products, including leftover food.
None of this will come under the consideration of new CMA chief Andrew Tyrie. Little of it will be in the formal offer documents. The Government should insist that it is.