Asda and Sainsbury merger blocked
So it’s “sasda la vista, baby” for the proposed Asda and Sainsbury merger as the UK Competition and Markets Authority decided to block it.
The regulator said that consumers would suffer from the supermarket combo due to higher prices, lower quality and choice of products and a poorer shopping experience overall for UK shoppers.
Obviously, Sainsbury’s did not agree but it will not contest the decision.
I would have thought that this is good news for shoppers and suppliers, annoying for companies like Morrisons and Iceland who were among those hoping to pick up new stores at bargain prices from the combined entity, and a right pain for Sainsbury’s as well as Asda’s owner Walmart that has been shrinking its international business recently.
I have a sneaking suspicion that Sainsbury’s was relying on this to delay scrutiny of its underlying business and integration of the two companies would have been a convenient excuse for any underperformance in the short to medium term.
Unfortunately for Sainsbury’s, it won’t have that luxury now and will have to do things the old fashioned way and find ways of improving its existing business.
Tesla’s first quarter results
The other thing I wanted to talk about today was Tesla’s rubbish first quarter results as it continues to struggle with a plethora of production set-backs, U-turns on its sales strategies and Elon Musk’s part in a number of scandals and scrapes with regulators.
The recent viral video of a parked Model S spontaneously combusting in China was just another kick in the teeth for a company that could do with some good news.
No amount of chat from Musk about robo taxis can disguise the disappointment of announcing a loss per share that was over double market expectations.
Die-hard Musk fans will say that he can still turn around Tesla’s fortunes, but all the while the established manufacturers are gaining ground with more appealing models that get delivered with no dramas.
I continue to believe that he would be better off combining Tesla with an established manufacturer, with a combined entity benefiting from Tesla’s tech know-how and a “proper” car manufacturer’s production and distribution capacity.
Given his ego, however, I doubt this will happen – but you never know!