Somerfield ordered to sell 12 stores

Supermarket group Somerfield has been ordered to sell 12 stores, following an investigation by the Competition Commission (CC).

The investigation into Somerfield’s purchase of 115 stores from Morrisons last year was prompted by fears of a “substantial lessening” of competition in 12 local grocery retail markets in the UK.

The CC had initially identified 14 sites where there were competition concerns. However, the Commission said that, as a result of new evidence from Somerfield, it was now satisfied that the acquisition of stores in Bedlington and Paisley would not be anti-competitive.

Under the ruling, Somerfield will have to sell stores acquired from Morrisons in Filey, Middlesborough, Linthorpe, Newark, Pocklington, Poole Bearwood, South Shields and Whitburn in Scotland.

However, in Johnstone, Peebles and Yarm, Somerfield can choose to either sell the acquired store or an existing Somerfield branch.

The supermarket chain was also ordered to sell stores that were closed in Kelso and Littlehampton, although it can continue to operate the acquired store.

Commenting on the decision, Christopher Clarke, Chairman of the inquiry, said: “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.

“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.”

(KMcA/SP)