All this spelt good news for consumers, we were told especially those cruelly denied the opportunity to sample Asda's prices or Morrisons' "unique offer" through an accident of geography.
For all the emphasis on price, however, supermarket bosses progressed surprisingly quickly from Powerpoint boasts over who had the cheapest basket to a battle for the hearts and minds of suppliers.
Details of each retailer's commitment to local sourcing and smaller producers were trotted out, along with pledges to source British wherever possible which prompted some sniggering from the floor.
But things swiftly moved on to what the retail landscape might look like if EDLP became the dominant pricing model in the market, prompting a fascinating debate between Sainsbury and Asda about the merits of their respective pricing strategies.
Consumers preferred EDLP because it was fair, consistent, and they understood it, argued Asda's Tony DeNunzio. Suppliers preferred it as it removed peaks and troughs in the supply chain, and made for more "constructive relationships," he claimed. "There's one negotiation.We don't keep coming back asking for more money."
Conversely, Sainsbury argued consumers liked the excitement of a good promotion, which in turn drove volume for suppliers. Furthermore, a successful Sainsbury bid would prevent the UK market going the same way as Germany, where range, choice and product innovation were stifled by an obsession with price. "We are in favour of low prices," said Sir Peter Davis, "but not to the exclusion of everything else."
He added: "If Tesco or Wal-Mart were successful, then the resulting duopoly would be very much against the interests of both consumers and suppliers. By contrast, there would not be any substantial lessening of competition if we were to acquire Safeway."
Suppliers suspicious
Baffling though this statement might appear coming from the number two player in the market, Sainsbury was not backed by a multibillion dollar US parent or an international hypermarket business, stressed its boss. "Wal-Mart and Tesco wield considerable buying power because of their size and international scale, and risk creating an unbalanced market."
His comments were dismissed as sour grapes by Tesco, which said it should not be penalised for doing a better job than rivals.
Suppliers, meanwhile, were equally suspicious of both Wal-Mart and Sainsbury given a successful bid from either would lead to a scenario whereby the top two players would control more than 50% of the market. They were also left wondering who was going to fund the proposed savings, as the bidders stressed how they would all drive lower prices across the market.
NFU marketing director Robin Tapper feared a Tesco, Asda or Sainsbury victory could be "catastrophic" for farmers, while Yorkshire Farmers' Paul Rhodes warned of impending apocalypse for the UK pig industry if there were any further consolidation of buying power. "With the exception of Waitrose and Morrisons,many of the major retailers have spoken kind words, but the culture in the buying rooms is rather different."
If supermarket bosses were getting twitchy at this point, McBride chief executive Mike Handley offered some succour. At least some cost savings proposed by the established supermarkets could be funded through synergies, he said. If Safeway fell into the hands of a financial buyer, such synergies could not be realised, and price cuts would come out of suppliers' wallets.
Whatever the eventual outcome, things could not simply carry on as before, and Sainsbury's boss Sir Peter left the audience with the tantalising prospect of a plan B, were all bids blocked by Sir Derek's panel first time round. "What about two bidders teaming up or a break-up? I am not sure if it will be possible to put Safeway back in its box after all this."
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For all the emphasis on price, however, supermarket bosses progressed surprisingly quickly from Powerpoint boasts over who had the cheapest basket to a battle for the hearts and minds of suppliers.
Details of each retailer's commitment to local sourcing and smaller producers were trotted out, along with pledges to source British wherever possible which prompted some sniggering from the floor.
But things swiftly moved on to what the retail landscape might look like if EDLP became the dominant pricing model in the market, prompting a fascinating debate between Sainsbury and Asda about the merits of their respective pricing strategies.
Consumers preferred EDLP because it was fair, consistent, and they understood it, argued Asda's Tony DeNunzio. Suppliers preferred it as it removed peaks and troughs in the supply chain, and made for more "constructive relationships," he claimed. "There's one negotiation.We don't keep coming back asking for more money."
Conversely, Sainsbury argued consumers liked the excitement of a good promotion, which in turn drove volume for suppliers. Furthermore, a successful Sainsbury bid would prevent the UK market going the same way as Germany, where range, choice and product innovation were stifled by an obsession with price. "We are in favour of low prices," said Sir Peter Davis, "but not to the exclusion of everything else."
He added: "If Tesco or Wal-Mart were successful, then the resulting duopoly would be very much against the interests of both consumers and suppliers. By contrast, there would not be any substantial lessening of competition if we were to acquire Safeway."
Suppliers suspicious
Baffling though this statement might appear coming from the number two player in the market, Sainsbury was not backed by a multibillion dollar US parent or an international hypermarket business, stressed its boss. "Wal-Mart and Tesco wield considerable buying power because of their size and international scale, and risk creating an unbalanced market."
His comments were dismissed as sour grapes by Tesco, which said it should not be penalised for doing a better job than rivals.
Suppliers, meanwhile, were equally suspicious of both Wal-Mart and Sainsbury given a successful bid from either would lead to a scenario whereby the top two players would control more than 50% of the market. They were also left wondering who was going to fund the proposed savings, as the bidders stressed how they would all drive lower prices across the market.
NFU marketing director Robin Tapper feared a Tesco, Asda or Sainsbury victory could be "catastrophic" for farmers, while Yorkshire Farmers' Paul Rhodes warned of impending apocalypse for the UK pig industry if there were any further consolidation of buying power. "With the exception of Waitrose and Morrisons,many of the major retailers have spoken kind words, but the culture in the buying rooms is rather different."
If supermarket bosses were getting twitchy at this point, McBride chief executive Mike Handley offered some succour. At least some cost savings proposed by the established supermarkets could be funded through synergies, he said. If Safeway fell into the hands of a financial buyer, such synergies could not be realised, and price cuts would come out of suppliers' wallets.
Whatever the eventual outcome, things could not simply carry on as before, and Sainsbury's boss Sir Peter left the audience with the tantalising prospect of a plan B, were all bids blocked by Sir Derek's panel first time round. "What about two bidders teaming up or a break-up? I am not sure if it will be possible to put Safeway back in its box after all this."
{{ANALYSIS }}
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