In a report released by Sainsbury’s, the supermarket explains what its merger with Asda really means for suppliers.
Working with is described to be stronger combined Sainsbury’s and Asda, the supermarket claims its suppliers will have the opportunity to develop its product offer, make its supply chains more efficient, and grow its businesses.
Sainsbury’s has said that the majority of the food and groceries it sells in store are supplied by large multi-national companies who operate on significantly higher profit margins than supermarkets do.
It says that a significant proportion of the synergies it expects to achieve from the combination of Sainsbury’s and Asda, will come from the harmonisation of pricing from large suppliers.
In effect, it believes this will enable both of the businesses to benefit from the lower prices already being offered to either Sainsbury’s or Asda.
Sainsbury’s has said it will be able to lower the cost of living for millions of its customers, aiming to reduce prices on essential items by around 10%.
In addition, it expects these lower prices will in turn, drive higher volumes for the retailer’s suppliers.
Sainsbury’s has said it will continue to nurture and develop outstanding small suppliers and bring their distinctive and innovative food to its customers.
It believes the merger would give suppliers currently working with only Sainsbury’s or Asda the opportunity to grow as they gain access to more customers through the combined group.
Sainsbury’s has confirmed it has set up a dedicated Future Brands team to progress the work it has already done with its small suppliers and to further encourage and support them through the process of bringing their food to a large and diverse market.
To read the full report, click here.