Sainsbury’s held talks with Morrisons over a potential multibillion-pound merger, but Sainsbury’s ultimately withdrew from the talks.

The two grocers entered preliminary discussions between November 2025 and February this year, according to the Financial Times.

The deal would have created a supermarket group with almost a quarter of the UK grocery market share. While, discussions are no longer active, a future deal has not been ruled out.

A combination of Sainsbury’s, Britain’s second-largest supermarket, and Morrisons would have created a business with an estimated 23.6 per cent share of the grocery market, compared with market leader Tesco’s 27.8 per cent.

The deal would have brought together Sainsbury’s estate of more than 600 supermarkets and around 900 convenience stores with Morrisons’ roughly 500 supermarkets and more than 1,700 convenience locations.

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Any agreement would face close scrutiny from the Competition and Markets Authority, which blocked Sainsbury’s proposed £7.3bn merger with Asda in 2019 after concluding that the deal could result in higher prices and reduced competition for shoppers.

However, the grocery market has changed substantially since then. Aldi and Lidl have continued to take share from the traditional supermarkets, with Lidl overtaking Morrisons this year to become Britain’s fifth-largest grocer. Aldi and Lidl together now account for 19.3 per cent of grocery sales, according to figures cited by the FT.

Morrisons has been owned by US private equity firm Clayton, Dubilier & Rice since its 2021 takeover. The transaction left the Bradford-based grocer carrying a heavy debt burden, with the FT putting its debt at £7.5bn following the deal.

CD&R is understood to remain open to a combination between Morrisons and another major supermarket group, while Asda has also been cited as a potential participant in a fresh round of consolidation across the sector.