Morrisons x Sainsbury's: what a supermarket merger would mean for food and drink suppliers

Morrisons and Sainsbury's held talks about a possible merger. If a deal ever goes ahead, it would be one of the biggest shake-ups UK grocery has seen in years, and the businesses that supply them would feel it first.

It's still a big "if". But for anyone selling into the big four, it's a story worth paying close attention to now, not later.

What's been reported

According to the Financial Times, the two retailers met in November 2025 and again in February this year to discuss a multi-billion-pound merger.

• The combined share: Kantar data puts a joint Sainsbury's-Morrisons business at 23.6% of the market, against Tesco's 27.8%.
• The pressure on Morrisons: its private equity owners, CD&R, took over in 2021. Debts are now estimated at around £7.5 billion, and the business has closed more than 100 convenience stores and restructured its teams.
• The owners' position: Sky News reports CD&R remains open to a merger, with Asda also expected to show interest if talks reopen.
• The regulator: the Competition and Markets Authority (CMA) blocked Sainsbury's and Asda in 2019. It has since promised a more flexible, business-friendly approach, but any deal would still face tough conditions, possibly including store closures.

Opinion is split. Mark Field of Prof Consulting Group sees further consolidation as a case of "when, not if", and thinks it could benefit food manufacturers. Julian Wild of Wilkin Chapman Rollits doubts it will ever happen, pointing to likely objections over consumer choice and the impact on suppliers.

What a merger could mean for suppliers

Whenever two retailers come together, the supply base is where the real work happens. Based on how retail consolidation usually plays out, suppliers could expect:

• Range reviews. Two ranges become one. Some suppliers win bigger listings, others lose shelf space altogether.
• Tougher negotiations. A buyer with nearly a quarter of the market has more buying power. Margins and terms would come under pressure.
• Own-label shifts. Morrisons makes a lot of its own food. That manufacturing capability could change who supplies what, and how much.
• New ways of working. Different systems, buying teams and supply chain processes would need to be brought together, often over several years.

The flip side is opportunity. Suppliers who are well prepared, well connected and quick to adapt could come out of a deal with more volume than before.

And here's the point we keep coming back to. Whether a supplier ends up winning or losing usually comes down to the people in its commercial team.

Why commercial talent matters more than ever

From where we sit, a potential merger like this changes what good looks like in a commercial team.

• National Account Managers who can hold their ground. When a retailer gets bigger, the account manager's relationships, data and negotiating skill matter more. The best ones protect margin and grow listings even when the buyer has all the leverage.
• Category and insight specialists. Range reviews are won with evidence. People who can turn shopper data into a clear story for the buyer become invaluable.
• Commercial and sales leaders who can plan for change. A merger means rethinking customer mix, pricing and forecasts. Strong leaders plan for several outcomes rather than waiting to see what happens.
• Demand planners and supply chain teams. Merged retailers often change their ordering, distribution and service-level expectations. The teams behind the scenes need to keep up.

Here's the catch. Experienced grocery NAMs and commercial leaders, especially those with Sainsbury's or Morrisons experience, are already hard to find. If talks restart, demand for them will rise quickly, and the businesses that already have strong teams in place will have the advantage.

After decades recruiting in food and drink, we've seen this pattern before. The best commercial people aren't usually looking. They move because someone they trust brings them the right opportunity at the right time.

What this means for you

If you're a supplier, these are worth thinking about now, deal or no deal:

1. How exposed are you? If Sainsbury's and Morrisons together make up a big share of your sales, a combined buyer would change your business.
2. Is your account team strong enough? Look honestly at your NAMs. Would they win a joint range review against your toughest competitor?
3. Do you have the data to back your case? Category and insight skills could decide which suppliers keep their listings.
4. Have you spread your risk? Growth with Tesco, the discounters, M&S, foodservice or export gives you options if one big customer becomes even bigger.

If you're a commercial professional, your experience is about to become even more valuable. National Account Managers, category managers and commercial leaders with big-four experience are always in demand, and a story like this only adds to it. If you've been thinking about your next step, it's a good time to talk.

Where do you stand?

Would a Sainsbury's-Morrisons merger be good news for UK food manufacturers, or would it squeeze suppliers even harder? We'd love to hear your view. Join the conversation on our LinkedIn page.

If you're a supplier looking to strengthen your commercial, category or account management team, we'd be happy to talk about the people you need and where to find them, including those who aren't actively looking.

If you're a commercial professional thinking about what's next, we're always here for a confidential, no-pressure chat.

Call us on 07826 916595, email mail@theovalpartnership.co.uk or browse our latest vacancies.

Sources

• Food Manufacture: Morrisons x Sainsbury's: The deal that could redraw the UK supermarket map