Convenience store chain McColl’s has been given the green light from the competition watchdog for a “transformational” deal to take over nearly 300 outlets from the Co-operative Group.
The final clearance from the Competition & Markets Authority (CMA) came yesterday after the acquisition was first announced in July.
It will see McColl’s add another 298 shops to its 1,000-strong convenience store estate. The deal will also allow the Co-op to focus on its larger stores.
Jonathan Miller, chief executive of McColl’s, which owns the Glasgow-based RS McColl chain of shops, said: “This is a transformational deal, which substantially accelerates our growth strategy and expands our neighbourhood presence for the benefit of our customers.”
The group will start integrating the new stores into its estate in January and expects the shops to be converted to its branding by the end of next August. McColl’s recently unveiled its sixth year in a row of rising sales, posting growth of 1.9 per cent over the year to 27 November thanks to expansion.
But with the boost from new stores stripped out, like-for-like sales remained under pressure, falling by 1.7 per cent in the fourth quarter and 1.9 per cent over the full year.
Retail experts at Liberum said the Co-op stores purchase would see a “step-change” in McColl’s results.
Analyst Adam Tomlinson said: “McColl’s is consolidating the fragmented UK convenience sector and benefiting from a structural switch as shoppers make more frequent, top-up purchases.”
As well as its UK convenience stores, the group has 374 newsagents. The acquisition of the Co-op stores will boost its estate to more than 1,670.