Tesco’s convenience chain, One Stop, has acquired northeast independent retailer Mills Group for an undisclosed sum.

Mills Group was placed 22 on The Grocer’s most recent ranking of the Top 50 independent grocery retailers.

The retailer started life as a CTN operator but has diversified into convenience stores and supermarkets in recent years.

The acquisition of 77 Mills stores takes One Stop’s estate to 598 across England and Wales. Mills will retain its ownership of six supermarkets under the Nisa Extra banner.

“This is exciting news for One Stop,” said One Stop chief executive David Turner.

“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 and 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.”

Mills Group chief executive Nigel Mills added: “These stores and their staff will be in great hands with One Stop. They’re joining a brilliant team and will be very well looked after. I want to thank them for all their work and wish them the very best for the future.”

However, the Association of Convenience Stores called for competition authorities to investigate the deal, which pushes Tesco’s convenience estate to more than 1,700 stores.

“The competition authorities have repeatedly failed to grasp the implications of the continuing growth of Tesco’s shadow brand,” said ACS boss James Lowman.

“The Office of Fair Trading allowed the original acquisition by Tesco of over 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.”

Read more
Mills Group offloads small supermarkets (20 November 2010)
Will profits be cannibalised in Tesco’s race for space? (analysis; 4 September 2010)
Mills adjusts ranges for bargain hunters (28 August 2010)

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