UK competition watchdog, the Competition Commission has told supermarket chain Somerfield to sell 12 stores following its acquisition of 115 outlets from Wm Morrison Supermarkets.
The acquisition may be expected to result in a substantial lessening of competition in 12 local grocery retail markets in Great Britain, it said. In order to restore competition in these markets, Somerfield will have to sell the 12 stores to suitable grocery retailers approved by the CC.
The CC had provisionally identified 14 local markets where the acquisition gave rise to competition concerns. However, as a result of new evidence from Somerfield, the CC is now satisfied that its acquisition of stores in Bedlington and Paisley will not be anti-competitive.
“Following responses to our provisional findings, we have now concluded that Somerfield’s acquisition of 12 of the stores is expected to lead to a significant reduction in competition in their local markets,” said Christopher Clarke, chairman of the inquiry. “It is important for customers that competition in these local markets is restored and so Somerfield must now sell the specified stores to grocery retailers who are able to compete effectively on price, quality, range and service in these areas. Somerfield is therefore required to sell 12 stores to purchasers approved by the CC.”
In seven towns, it must sell the stores which it had acquired from Morrisons; these are in Filey, Middlesbrough Linthorpe, Newark, Pocklington, Poole Bearwood, South Shields and Whitburn (Scotland). In Johnstone, Peebles and Yarm, Somerfield can choose to sell either the acquired store or a specified existing Somerfield store. In Kelso and Littlehampton, where it had already closed its existing store, it must sell the closed store but can continue to operate the acquired store. All are mid-range stores except a convenience store at Filey and a one-stop shop at Johnstone.