It was a judgement that should have been reached a long time ago, but one that, given its timing, could carry far greater significance for retail.

Many, me included, felt that Amazon’s attempt to purchase a minority stake in online food delivery platform Deliveroo should have been given the green light by competition authorities months ago, without too much fuss.

Instead, the Competition and Markets Authority (CMA) decided last December to launch a more detailed phase two investigation into the deal, after finding “serious competition concerns for UK customers”.

Now, in the wake of the “wholly unprecedented circumstances” created by coronavirus, the watchdog has turned its back on such fears, for the good of the Deliveroo business and of competition.

“The CMA has to send a clear message to the market that it is more open to mergers and acquisitions than it was previously”

The CMA concluded that Deliveroo, despite being “a highly successful company”, would “not be able to meet its financial commitments and would have to exit the market” without Amazon’s investment.

In the days since the CMA’s verdict, those words have sunk in deeper and deeper with every passing minute. It is a hard-hitting, prescient statement.

Deliveroo, a highly successful, innovative business – one that is leveraging technology to offer its restaurant partners a new route to market and its customers unparalleled catering convenience – could have been gone, in the blink of an eye and through no fault of its own, amid the coronavirus crisis.

If a company such as Deliveroo has been pushed to the brink in this manner, what does it mean for more traditional retail businesses that are still reliant on a physical store presence rather than smartphones to reach their shoppers?


The CMA must now ask itself that question and pivot its thinking in a similar way when other M&A deals cross its path. The authority has to send a clear message to the market that, in light of the coronavirus pandemic, it is more open to mergers and acquisitions than it was previously, in order to preserve businesses like Deliveroo that might otherwise go bust.

The CMA deserves credit for reassessing the Amazon-Deliveroo case in a speedy manner, casting its previous reservations aside and coming to the correct conclusion for Deliveroo, its staff, its customers and the economy.

In the watchdog’s own words, the impact of lockdown “meant reassessing the focus of this investigation, reacting quickly to the impact of the coronavirus and deciding what it would mean for the businesses involved in this transaction and, in turn, for customers”.

“Not all retailers will have the strength of brand, business model and balance sheet required to get through this health emergency alone”

Given the current state of economic play, that position simply cannot be unique to this investigation. There is still time, for example, for the CMA to perform a similar U-turn on JD Sports’ acquisition of Footasylum – a deal it effectively kiboshed in February.

The CMA claimed then the combination “substantially lessens competition nationally” and could result in shoppers getting fewer discounts, worse customer service and reduced choice both in stores and online.

Yet Footasyulm is a business that was toiling long before Deliveroo was hit by coronavirus, having issued a string of profit warnings following its 2017 flotation. The chain was worth north of £170m at that time but has floundered since and was clearly struggling to achieve match fitness in the pre-coronavirus landscape, let alone the world we are being presented with now and in the future.

Without a suitable owner like JD, which knows the sports fashion market inside out, the impact of coronavirus could have the potential to tip Footasylum over the precipice – in the same way the pandemic has already pushed well-known names such as Debenhams, Laura Ashley, BrightHouse, Cath Kidston and Oasis and Warehouse into administration. JD offers the same sort of lifeline to Footasylum that Amazon has thrown to Deliveroo.

The CMA has the power to help secure Footasylum’s longer-term future by overturning its provisional verdict, which suggested JD would need to sell the chain to address competition concerns. In doing so, the authority would send a huge statement of intent to the market. Suddenly, retailers that may have written off M&A as a viable option during this crisis – largely as a result of the CMA’s recent hard-line stance on such deals – would be offered new light at the end of this tunnel.

Collaboration catalyst

The stark fact is that not all retailers will have the strength of brand, business model and balance sheet required to get through this health emergency alone. Collaboration and consolidation are going to be vital for many companies if they are to secure their long-term futures and return to growth once this pandemic is beaten.

That is already being recognised in other ways across the globe. Alibaba, for instance, revealed this week that it wants to add 1,000 new international brands to its Tmall platform in the next 12 months, giving companies a route into the lucrative Chinese market that may no longer be financially feasible to achieve under their own steam.

Whether it is supply deals, tech partnerships, investments, mergers or acquisitions, the Amazon-Deliveroo deal has to be a catalyst for more collaboration to take place during this crisis.

For many, it will be the difference between success and financial failure – just ask Deliveroo.