CMA set to approve sale of 28 stores by buyer Morrisons to ease competition concerns
Morrisons’ takeover of McColl’s is moving closer to being cleared by the Competition & Markets Authority (CMA) with the supermarket giant’s offer to sell off 28 of the convenience chain’s store.
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.
“If, after reviewing the responses to our consultation, we conclude that the competition issues have been addressed, the deal will be cleared.”
The CMA began looking into the £190million acquisition earlier this year and, following a phase one investigation, announced yesterday, 10 October, that it has found the deal would not harm the vast majority of shoppers or other businesses, but that it raised competition concerns in 35 local areas.
The two retailers accepted these concerns and engaged with the CMA in discussing potential remedies with Morrisons offering to divest 28 McColl’s stores – 26 in England in areas including Swindon, Lincoln and Brentwood; the Perth outlet in Scotland, and Newport in Wales – to a purchaser or purchasers to be approved by the authority.
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 proposed number of store sales 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 accepted, the deal would be cleared to proceed.
Set up in Glasgow in 1901, McColl’s group has its head office in Brentwood and is now made up of McColl’s Retail Group, Martin McColl Limited, Clark Retail Limited, Dillons Stores Limited, Smile Stores Limited, Charnwait Management Limited and Martin Retail Group, and its 1,100-plus estate of managed stores and newsagents all sell a wide range of greeting cards alongside the foodstuffs and essential items.
With 500 grocery stores across the UK, Morrisons is owned by Clayton, Dubilier & Rice (CG&R) which is also the parent company of the Motor Fuel Group that owns over 800 convenience stores, the vast majority of which are attached to its petrol stations. CG&R is also the majority shareholder of publishers UK Greetings and American Greetings.
The proposed deal saved all 16,000 staff jobs at McColl’s after the beleaguered convenience store chain went into administration on 6 May, with the acquisition by Morrisons announced three days later.
McColl’s had faced financial pressure over recent years resulting from Covid19-related disruption and, most recently, supply chain challenges, creating issues in product availability. With 16,000 staff, roughly 6,000 on a full-time equivalent basis, the sheer size of the operation – which covers McColl’s, Martin’s newsagents, and RS McColl’s in Scotland – makes the group a large greeting card retailer.
Top: The CMA is set to approve McColl’s becoming part of Morrisons group
