Supermarket giants embarking on a £7.3bn merger are being urged to guarantee hard-up families are not clobbered by school uniform price hikes.
Lucy Powell, Labour MP for Manchester Central, says the takeover of Asda by Sainsbury’s could create a monopoly and see families on the breadline pushed into poverty by the cost of dressing their children for school.
It comes after a study by the Children’s Society estimated that one million children live in families getting into debt while struggling to pay for uniforms this year.
Asda and Sainsbury’s dominate huge swathes of the country and the impact of their planned merger is currently being probed by the Competition and Markets Authority (CMA).
A basic uniform at Asda costs £10, compared to £15 at Sainsbury’s.
George is the second largest value clothing retailer, TU is the fifth and the merger will put the new business on a par with Primark.
While Sainsbury’s argues a larger business will cut costs, and therefore prices, Powell fears a sheer lack of competition will mean families eventually lose out, especially in places with more Asda stores.
Powell is urging the CMA and the two supermarket giants to offer families a binding price guarantee before the merger is complete.
“Going back to school shouldn’t push families below the breadline,” Powell told HuffPost UK.
“School uniforms are a real drain on family budgets, particularly for the most vulnerable families and I have real concerns that this Sainsbury’s takeover of Asda will lead to a rise in uniform costs, particularly in areas where these two supermarkets are dominant.
“This takeover will have a big impact on lots of different markets, including clothing, so it is vitally important that the Competitions and Markets Authority take this wider view into account when scrutinising this deal.
“I want to see a commitment from Sainsburys and Asda to freeze uniform costs, as part of any merger, to safeguard family budgets and not push parents and children into poverty.”
The Children’s Society found families pay an average of £340 per year to kit out each child going to secondary school – an increase of 7 percent, or £24, since 2015. Parents of primary school children spent on average £255, an increase of two percent since 2015.
As well as the impact on the consumer, the new supermarket could also lead to the consolidation of two buying operations, with TU’s based in Coventry or and George’s in Lutterworth, Leicestershire.
Some stores could also be sold off so the business does not breach competition rules.
The CMA, which is fast-tracking its probe into merger, has said that its investigation will take in potential price rises, including those of clothing.
Andrea Coscelli, chief executive of the CMA, said: “We will carry out a thorough investigation to find out if this merger could lead to higher prices or a worse quality of service for shoppers and will not allow it to go ahead unless any concerns we find are fully dealt with.”
A spokesman for Sainsbury’s claimed the takeover of Asda would save families money.
He said: “Our Back to School range offers families great quality and value uniforms. This will not change.”