Just hours after the merger between Sainsbury’s and Asda was announced, a venture that could very well slash jobs and shut stores, Sainbsury’s chief executive Mike Coupe had only one thing in mind – the windfall of cash the merger will bring him.
Just before Coupe was due to go live on an interview with ITV News, he was caught on camera singing the tune “We’re in the money”, a song from the Broadway musical 42nd Street.
“We’re in the money, the sky is sunny, let’s lend it, spend it, send it rolling along,” Coupe sang as he sat waiting to be interviewed.
As a shareholder of Sainsbury’s, Coupe is indeed set to cash in – Sainsbury’s shares soared by 15 per cent after the announcement of the merger yesterday (April 30).
Coupe currently earns an annual salary of nearly £1m and owns 1.2m in Sainsbury’s shares. The Mirror reported that the rise in value of the shares following the merger boosted Coupe’s portfolio value by more than half a million pounds, from £3.18m to £3.81m.
Coupe called his singing an ‘unguarded moment’ as he apologised and said the song – incidentally often associated with greed or a sudden windfall – was “an unfortunate choice”.
But Unite general secretary Len McCluskey tweeted that “This ‘unguarded moment’ by Sainsbury’s CEO won’t be taken well by the thousands of Unite, GMB and Usdaw members at ASDA/Sainsbury’s worrying about their jobs.”
He added that Labour’s shadow business secretary Rebecca Long-Bailey was “right to call for stronger protections for all impacted by mergers” – a call she made during an urgent question she raised in Parliament yesterday (April 30).
Long-Bailey highlighted that the scope for government to intervene in mergers is far too weak.
She said that “with a deal that could radically alter the whole grocery sector from farm to factory to supermarket shelf”, the government should use its powers to broaden the scope used in the public interest test to intervene in mergers and takeovers “of economic and national significance.”
She noted that a thorough investigation by the Competition Markets Authority (CMA) was “imperative” while she called for assurances that the CMA halt the merger during its investigation.
Long-Bailey pointed to the fact that the merger will create a massive supermarket duopoly, with Sainsbury’s/Asda and Tesco dominating with a 60 per cent market share of the sector. This, she said, would hit “suppliers, farmers and manufacturers, whose prices and terms will be driven down, pushing many to the edge of collapse.”
The market dominance would also, she said, “risk consumer choice and provide less incentive” for supermarkets to offer good prices to shoppers.
Labour MPs called for cast-iron assurances on jobs and terms and conditions in the merger.
“Supermarkets are powerful — as employers and along the supply chain,” said Labour MP Jack Dromey. “They must not be allowed to abuse that power.”
Labour MP Justin Madders added that “in takeovers and mergers of this nature, as sure as night follows day, it is the workers who end up paying through the efficiency savings that have been set up.”
McCluskey, too, said that Unite was “sceptical about public assurances that there will be no job losses or store closures as a result of the merger between Sainsbury’s and Asda.”
“Both supermarket giants have earmarked £500m in synergies from the merger, which from the bitter experience of our members means job losses at some point down the line,” he said.
“It is not just store workers who could be under threat from a drive to achieve ‘synergies’, but the thousands who work in distribution centres and logistics across the UK,” McCluskey added.
He noted that he will be meeting with Coupe to seek assurances “that public promises over jobs and stores will be backed up with legally binding guarantees on job security for all workers.
“We would also urge the House of Commons Business, Energy and Industrial Strategy Committee to use its position to consider the merger and its impact on the sector and the jobs it sustains.”