However, this turned out not to be the case. Long-term trends in consumer behavior that had changed competitive dynamics in the sector, and new approaches by the CMA to assessing local market competition, had indicated that consolidation between the UK’s larger retailers might receive regulatory clearance. The effectiveness of this signaling system appeared to break down quite dramatically in 2018 when the CMA prohibited a merger between the UK’s second and third largest grocery retailers. However, merger review decisions have played an important role in signaling the types of deals that are likely to be acceptable. Given that three quarters of the grocery M&A deals that have been reviewed have been cleared unconditionally, this might be taken to indicate a fairly light touch approach to the sector. Over the past 20 years, grocery retailing has probably been the sector most investigated by the UK competition authorities.
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