Morrisons Daily McColls 2

The proposal by Morrisons to sell 28 McColl’s stores to address competition concerns following its acquisition of the convenience chain in May, has been accepted by the Competition and Markets Authority (CMA).

The announcement averts a full-scale Phase 2 inquiry into the purchase and follows the CMA’s announcement in July 2022, that it would investigate Morrisons reported £190 million purchase of the stores owned by McColl’s Retail Group plc.

McColl’s operates convenience newsagent shops, with over 1,100 stores across England, Scotland, and Wales, while Morrisons, owned by parent company Clayton, Dubilier & Rice (CD&R) - has around 500 grocery stores in the UK. CD&R is also the parent company of the Motor Fuel Group (MFG). MFG owns around 900 convenience stores, the vast majority of which are attached to its petrol stations.

Following its Phase 1 investigation, the CMA found that the deal would not harm the vast majority of shoppers or other businesses, but that it raised competition concerns in 35 areas. The two retailers accepted these concerns and engaged with the CMA in discussing potential remedies.

Morrisons has now offered to divest 28 McColl’s stores to a purchaser or purchasers to be approved by CMA. This includes 26 stores in England (in areas such as Swindon, Lincoln and Brentwood), 1 store in Scotland (Perth) and 1 store in Wales (Newport).

The CMA  said it is minded to accept these proposals, which appear to be suitable to restore the loss of competition brought about by the deal across each of the 35 local areas. While the number of McColl’s stores that Morrisons is proposing to sell is lower than the number of areas in which concerns were identified, the sale of some stores would address the concerns in multiple areas.

The CMA is now consulting on the proposals – known as undertakings – for the sale of these stores. If the CMA accepts the proposals, the deal would be cleared to proceed.

Sorcha O’Carroll, CMA Senior Director of Mergers, said: ”Our preliminary view is that the sale of these stores will preserve competition in these local areas and prevent consumers from losing out due to this deal, at a time when shoppers are already facing rising prices. 

”If, after reviewing the responses to our consultation, we conclude that the competition issues have been addressed, the deal will be cleared.”