J Sainsbury held merger talks with rival grocer Morrisons earlier this year - a deal that would have represented the most significant tie-up in the sector for more than five years.
Sky News can reveal that the two companies held exploratory discussions some months ago.
The talks are not thought to be active currently, although industry sources believe another wave of supermarket industry consolidation is inevitable in the next three years.
Retail insiders said on Monday that Morrisons' owner, the private equity firm Clayton Dubilier & Rice, would remain open to a tie-up with one of the chain's major competitors.
Asda, which, like Morrisons, is owned by private equity investors, would also be expected to be active in a fresh round of corporate dealmaking, according to analysts.
The last attempt to merge two of the UK's big four food retailers came in 2020, when Asda and Sainsbury's came close to combining.
That deal was blocked by competition regulators.
However, retailers believe the industry landscape has shifted so far since then - with Aldi and Lidl growing into formidable discount competitors - that a deal between two of Asda, Morrisons and Sainsbury's would be far likelier to gain approval.
Recent market share data from Kantar suggests that a combined Sainsbury's and Morrisons would hold a 23.8% share of the market, still well short of Tesco's 28.2%.
Issues such as food security and rising costs for supermarkets have also become more pressing matters for the industry as it seeks to rein in costs in order to retain competitive pricing for consumers.
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Sainsbury's, Morrisons and CD&R declined to comment.
(c) Sky News 2026: Sainsbury's held talks about merger with supermarket rival Morrisons
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