Morrisons’ takeover of McColl’s newsagents has resulted in competition concerns in just a small number of areas, a watchdog has found.
The Competition and Markets Authority (CMA) said the supermarket’s £190m rescue deal meant that the vast majority of areas will not face reduced competition.
However, in 35 areas, the deal has presented price increase worries for shoppers in a minority of areas where the brands currently compete.
McColl’s has an estate of more than 1,100 stores across England, Scotland and Wales, while Morrisons has some 500 shops.
Morrisons’ private equity owner Clayton, Dubilier & Rice, also owns Motor Fuel Group, which owns more than 800 convenience stores, most of which are attached to petrol stations.
After an initial phase one investigation, the competition watchdog found 35 areas would face reduced competition. This could result in higher prices or a lower quality service for customers.
Both firms have previously admitted a merger would prompt concerns in some areas and launched a discussion of solutions to tackle the worries.
Morrisons must now offer proposals to the CMA within five working days.
The CMA will then take five additional working days to either accept the proposed solutions in principle or refer the issue to a phase two investigation.
“As the cost of living soars, it’s particularly important that shops are facing proper competition so that customers get the best prices possible when picking up essentials or doing the weekly shop,” Sorcha O’Carroll, CMA senior director of mergers, said.
The watchdog is working closely with Morrisons to “ensure that it can provide the support that McColl’s needs to continue to operate during our investigation,” O’Carroll added.