Britain's antitrust watchdog said on Wednesday it has started investigating if supermarket group Morrisons' acquisition of certain assets of convenience store chain McColl's would lead to lesser competition.
Morrisons in May bought 1,160 McColl's stores in a so-called pre-pack administration.
The Competition and Markets Authority has set a deadline of 8 September for its initial decision.
In May of this year, the CMA said it was 'investigating the completed acquisition by Wm Morrison Supermarkets Ltd of certain assets of Mccoll’s Retail Group Plc, Martin McColl Limited, Clark Retail Limited, Dillons Stores Limited, Smile Stores Limited, Charnwait Management Limited, and Martin Retail Group Limited.'
Wholesale Supply Deal With McColl's
Morrisons, which trails market leader Tesco, Sainsbury's and Asda, has a wholesale supply deal with McColl's.
McColl's has seen over 200 stores converted to Morrison's Daily stores with a target of 450 by November 2022.
McColl's went into administration with debt of just under 170 million pounds ($201.98 million) and its stock was suspended from trading in May.
Morrisons and McColl's did not immediately respond to Reuters requests for comment.
In June, the UK retailer reported a 6.4% decline in underlying sales over its latest quarter, in what it called 'a very fragile and difficult consumer environment'.
Morrisons said its total revenue including fuel rose 2.6% to £4.6 billion (€5.35 billion) over the 13 weeks to 1 May, its fiscal second quarter, primarily due to a recovery of fuel sales, which increased 54%.