One Stop, Tesco’s convenience store business, has acquired 77 stores from rival chain Mills Group, it was revealed today.
Based in the Whitley Bay area, the Mills stores will increase the One Stop shop portfolio to 598 across England and Wales.
The Association of Convenience Stores (ACS) has called on the Office of Fair Trading to block the deal, arguing that Tesco will now own over 1,700 convenience stores in either its own branding or as One Stop and that this is unfair to competitors.
ACS CEO James Lowman said: “The OFT allowed the original acquisition by Tesco of over a 1,000 stores without adequate scrutiny in 2002 and the Competition Commission failed to address the issue in the two-year grocery market inquiry.
“They must not make the same mistake again; we need a full and robust investigation into the implications of the continued growth of the One Stop format.”
Tesco has come under criticism in the past over the price difference between its branded stores and the One Stop outlets, with the latter having higher prices for groceries.
Lowman added: “In the past the competition authorities have suggested that Tesco acquisitions will bring the benefits of Tesco’s scale and buying power to consumers, however in the case of One Stop this has been proved to not be the case.”
The deal is conditional upon regulatory approval and a decision should be made by spring 2011.
If the deal is completed Tesco says that One Stop will account for approximately 1.2 per cent of the approximately 50,000 convenience stores in the UK.
David Turner, CEO of One Stop, commented: “This is exciting news for One Stop. Acquiring 77 Mills stores means we can introduce One Stop’s quality, range and value to the communities they serve.
“We’ll be investing in refurbishing the stores, creating an even better shopping experience, as well as bringing down prices. I am also delighted to welcome the staff in these stores to the One Stop team.”