The Competition and Markets Authority (CMA) announced yesterday that it had begun a Phase 1 investigation into Asda’s recent acquisition of 132 grocery retail sites, with attached petrol stations, from the Co-op.
Asda completed the £438m deal in October last year as part of a strategy to grow its presence in the convenience channel.
A decision on the first phase of the inquiry is expected by 14 March, with the competition regulator inviting comments on the transaction from interested parties.
The CMA stated that it was considering whether the deal has resulted, or may be expected to result, in a “substantial lessening of competition within any market or markets in the United Kingdom for goods or services.”
Commenting on the move, a spokesperson for Asda said: “The acquisition of these sites is part of our long-term strategy to build a convenience business and bring Asda’s great value in fuel and groceries to more customers and communities throughout the UK. We referred the acquisition to the CMA when it completed last October and look forward to working collaboratively with them in the coming months.”
The acquisition includes 129 convenience stores of between 1,500 and 3,000 sq. ft., with attached petrol stations, and three development sites.
In November last year, Asda launched a separate standalone convenience store format, with plans to open around 300 more sites by the end of 2026.
NAM Implications:
- One way forward for Asda might be to cut forecourt petrol prices in the Co-op outlets…
- Thus gaining a competitive edge over other mults that have already applied inflationary increases to their forecourts.
- And demonstrating to the CMA that the Co-op acquisition was a way of increasing competition?
