The Co-op is facing a probe by the competition authorities over its acquisition of eight stores from collapsed convenience chain My Local.

The mutual revealed earlier this month it had agreed a deal to buy My Local stores in Croydon, Nottingham, Widnes, Blackpool, Stockport and Steeton. It is understood it has since added two more to the package.

However, the Competition and Markets Authority said today it has launched an initial investigation into the deal, which is expected to lead to a “phase 1” probe. 

My Local went into administration last month, putting 1,658 jobs at risk.

My Local, which was born out of Morrisons’ failed c-store business, only launched last October under the stewardship of convenience store veteran Mike Greene and was backed by private equity house Greybull Capital.

But in the wake of fierce competition from the Co-op, Tesco and Sainsbury’s, My Local struggled to gain a foothold in the sector as Greene and his senior team failed to return the business to profitability.

Spar parent company Blakemore Retail also agreed a deal this week to acquire seven My Local stores.