Supermarkets may close or be sold off if a £1.6bn offer by the Co-op to take over the Somerfield chain goes ahead.
Some of the chains' branches are in close proximity, such as in Headington and Summertown, in Oxford, Abingdon and Chipping Norton, which the Office for Fair Trading (OFT) regulations may require to be disposed of under competition law.
OFT spokesman Corinne Gladstone said she could not say which stores would be affected or when a decision would be made.
She added: "With two names that are merging, there is diminished competition to other properties. The Co-operative has given us another statement to show they are going to divest.
"The OFT is considering this for areas where there is an overlap with particular stores."
Abingdon pensioner Noel Boyle, of Audlett Drive, said he was concerned the town could lose an alternative to Waitrose.
He said: "If Somerfield went, there would be a lack of competition. It does have a fair amount of customers in there and it would be sad to see it go."
Headington off-licence worker Jason Stimpsoncor said: "It would be sad to see either one of them go as for as long as I can remember they have been trading. It would be sad for quite a few people."
A Co-op spokesman said staff who may be affected had been briefed.
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