First reported by the Financial Times, both retailers met in November 2025 and February this year to discuss a potential multi-billion-pound merger deal.
Any move to combine the two iconic supermarkets would create a much more competitive entity to take on market leader Tesco.
Kantar data suggests a joint Sainsbury’s-Morrisons entity would enjoy a 23.6% market share, compared with Tesco’s 27.8%, although constraints placed on any potential deal by the Competition and Markets Authority (CMA) could require Sainsbury’s to close stores.
Sky News reports that Morrisons’ American private equity owners Clayton, Dubilier & Rice (CD&R) remain open to a merger with a major competitor, with Asda expected to be “active” should there be a fresh round of talks opened.
CD&R’s takeover of the Bradford-based grocery retailer in 2021 saw it saddled with debts, which are currently estimated to stand at £7.5 billion.
This has resulted in a string of store closures, including more than 100 convenience stores, as well as a series of staff restructuring moves.
Speculation around mega-deals of this nature has abounded of late, following a change of approach from the CMA, which has, over the last 18 months, taken steps to become “more flexible and business friendly”.
Chief executive of Prof Consulting Group Mark Field believes this opens the door for an inevitable super-merger in the near future.
“Further consolidation within the UK grocery sector is likely when we look at the ownership models and how much the landscape has changed since the Sainsbury’s and Asda deal was blocked.
“When, not if it happens in my opinion, it will be beneficial for a significant part of the industry and food manufacturing sector. The rationale behind this includes close alignment across the UK on responsible sourcing strategies, and focus on British agriculture by the major retailers.”
He adds: “Should Morrisons be part of the mix, the wider access to their food manufacturing capabilities and its procurement structure would add additional benefits and interest to a potential deal or its impact.”
However, with both supermarkets enjoying historic status as giants of British grocery retail, and despite Morrisons’ recent trials and tribulations, any potential merger would significantly reduce competition for UK shoppers. As a result, stringent conditions would likely be imposed by the CMA if a deal were approved.
“I really can’t see this deal ever happening. The CMA would be all over it and there would be a huge number of objections to the reduction in consumer choice and the implications for suppliers,” explains Julian Wild, director at Wilkin Chapman Rollits.
“It is indicative of Morrisons in current ownership being in a poor place and the owners inevitably seeking an exit. Very hard to see where that is going to come from.”
He continues: “I suspect that Sainsbury’s were interested to have a look but would be highly unlikely to pay the necessary price given Morrisons’ financial position.”
For Field, however, Tesco’s dominant position in the market, and the growing strength of discounters Lidl and Aldi, means the CMA could genuinely give such a deal the green light. He believes it would also take into account the boost it could give to UK food security in what has been a troubled year for the sector.
“Would the CMA be more likely to approve a deal today? In short, yes. Tesco has increased market share and would remain the market leader with strong momentum. The traditional discounters Aldi and Lidl have significant market share and consumer following, while Marks and Spencer is also performing well.
“In a challenging environment, and at a time where food security and affordability remain priorities, consolidation should support the long-term competitiveness of the UK grocery sector and ultimately consumer choice.”
