The UK’s Association of Convenience Stores has reacted negatively to news that One Stop, a convenience chain run by UK retail giant Tesco, is to acquire 77 stores from English retailer Mills.
The ACS said that the UK’s competition authorities “should not repeat the mistakes of the past” when considering whether to allow Tesco’s latest takeover in the UK convenience channel.
The association warned that the announcement that One Stop had bought stores from Mills may not be commonly understood to be a takeover by Tesco. The UK’s largest retailer has owned and operated the One Stop store chain since 2002.
ACS chief executive James Lowman said: “The competition authorities have repeatedly failed to grasp the implications of the continuing growth of Tesco’s shadow brand. The OFT allowed the original acquisition by Tesco of over 1000 stores without adequate scrutiny in 2002 and the Competition Commission failed to address the issue in the two-year grocery market inquiry. They must not make the same mistake again; we need a full and robust investigation into the implications of the continued growth of the One Stop format.
“In the past the competition authorities have suggested that Tesco acquisitions will bring the benefits of Tesco’s scale and buying power to consumers, however in the case of One Stop this has been proved to not be the case.”
The acquisition will bring the number of One Stop stores to 598 across England and Wales, Tesco has said.
The deal is conditional upon regulatory approval and is expected to be completed in spring 2011. Following the deal, One Stop will account for around 1.2% of the approximate 50,000 convenience stores in the UK, according to IGD.
