James Moore: Poundland merger leaves consumers in sterling health

Could Poundland find an acceptable, fizzy wine to meet its hallowed price point were it to cross the Channel?

Excise duty rules that out here, but it would be a tough ask even in France where that problem doesn’t exist. All the same, you wouldn’t put it past its buyers.

The board would have cause to pop a few of the corks if they could work the oracle because the Competition & Markets Authority has dropped its objections to its planned merger with 99p Stores.

The watchdog has woken up to the fact that Poundland will face a brutally-competitive environment, even after the elimination of its cut-price competitor.

Moreover, there aren’t too many places where the combined company won’t have a competitor close by after the deal’s completion. Even when there isn’t a rival pound shop there will probably be a Tesco or an Asda which compete with Poundland across a variety of lines.

New data suggests it isn’t helping with sales at the two supermarkets which remain in decline.

They’ve yet to find an effective answer to some other discounters: Lidl and Aldi. Tesco used to say “why pay more” in its ads. Shoppers are taking it at its word.

Meanwhile, Poundland has been selling more groceries. Mercy! Ironically, its deal is one of those rare beasts that might benefit the consumer.

It creates an 800-store strong supertanker with ambitions to further colonise Britain’s battered High Streets. The added scale will strengthen the company’s buying power, making it easier for Poundland to source goods it can get under its self-imposed red line.

The CMA should have worked this out earlier. But at least the penny has finally dropped.

The deflationary environment that exists in Britain is a big help to Poundland and its rivals.

The recent turmoil in world markets and the fears that China’s economic situation have stoked about global growth mean it may be with us for longer than anyone realistically expected.

The natural resource-laden Footsie might have been in recovery mode this morning.