Tesco must sell the Joyce’s Supermarket outlet in Oranmore in order for its purchase of the rest of the chain to go ahead, the Competition and Consumer Protection Commission (CCPC) has ordered.
Tesco has made a legally binding commitment to divest the Joyce’s supermarket in Oranmore, Co Galway as a going concern to a suitable purchaser, who will be subject to CCPC approval, the regulator said.
It also committed not to buy the business back for a period of time following its sale. To ensure compliance, an independent monitoring trustee will be appointed.
Following notification of the sale last December the CCPC carried out a preliminary investigation of the proposed acquisition and concluded that a full investigation was required to establish if the proposed transaction could lead to a substantial lessening of competition.
That probe identified potential competition concerns related to the number of alternative effective competitor supermarkets in the Oranmore area.
The commitment means Tesco will buy and operate the other nine outlets owned and operated by the Joyce family for the past 70 years.
Tesco has said that all the stores will be rebranded as Tesco outlets next year and will include services such as online shopping, click and collect, clothing and homeware products.
The stores – which include three outlets in Galway city – employ about 500 people.
Joyce’s Supermarkets shields group turnover, but it’s likely to be at least €60m a year. Even on a margin of about 2pc, that would give a pre-tax profit of at least €1.3m.
The chain is headed by Pat Joyce, who started his professional retail career after leaving school, joining Tesco in London in 1979, where he did a trainee management course.
Mr Joyce said last December that the family had “carefully considered” the takeover approach from Tesco and was “very pleased to pass our business on to an established brand”.
He said that the takeover will be “of significant benefit” to staff, suppliers and customers.