Co-op’s acquisition of the My Local convenience store in Widnes, Cheshire may give rise to competition concerns.
In July and September 2016, Co-operative Foodstores Ltd (Co-op) bought 8 My Local convenience stores after their previous owners went into administration. Co-op already owns grocery stores in all 8 local areas, therefore the Competition and Markets Authority (CMA) examined the risk of competition overlaps in these areas.
The CMA found that the acquisition gives rise to competition concerns only in one area – Widnes, Cheshire – where the Co-op already owns 3 convenience stores in close proximity to each other.
Both the My Local store and Co-op’s existing stores competed closely prior to the Co-op buying the My Local store. The CMA found that, following the acquisition, only one other convenience store in Widnes is likely to compete effectively with Co-op. Other grocery stores in the area will exercise less of a competitive constraint because they sell different products and because customers would need to travel further to reach those stores.
Co-op can avoid the acquisition being referred for an in-depth investigation if it can offer a remedy to address the CMA’s competition concerns in the Widnes area. Co-op has until 26 October to do so.
Sheldon Mills, CMA Senior Director of Mergers and decision maker in this case, said:
“In most of the areas where Co-op acquired My Local stores, there was sufficient rivalry from other grocery retailers. However, in Widnes before the merger, Co-op had a strong presence with 3 convenience stores in the local area. Therefore, we believe that the merger may lead to competition concerns.”