Poundland should deny CMA its pound of flesh

Appropriately, Poundland has produced sales of £1.11bn in its first full-year of trading as a listed group. The single-price retailer sells everything from spectacles to window wipes at a pound a pop. The announcement could hardly have been neater if chief executive Jim McCarthy had made it while wearing a onesie on November 11.

But we live in a fallen and imperfect world. Poundland beat its singular target at the end of March and its aspirations to expand towards 1,000 stores were last week perplexingly checked by the Competition and Markets Authority.

Poundland, which has 600 shops, wants to buy rival 99p Stores, which has 250 outlets. The CMA says the £55m deal could lessen competition in 80 neighbourhoods where shops are close together.

The trustbuster is focusing on single-price retailers, saying that only Poundworld would offer national competition. It concedes other specialist discounters such as B&M are part of the picture, but ignores generalist price vigilantes, such as Aldi, and supermarkets like Tesco.

In earlier incarnations, watchdogs bent over backwards to insist competition was tickety-boo in retailing. The tendency of loss-leading Tesco stores to drive corner shops out of business was just the market ripping, mandarins claimed.

Poundland can appease the CMA by selling about 80 shops. Or the retailer can try to change the watchdog's mind during a five-month investigation. Mr McCarthy should pursue the latter course. A single price storekeeper should never be less than single-minded.

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