The UK's Competition and Markets Authority (CMA) has provisionally decided that discount supermarkets Aldi and Lidl should be subject to the same land agreement rules as the UK's largest grocery chains. This move aims to prevent these German discounters from using restrictive covenants and exclusivity arrangements to block rival supermarkets from opening stores nearby.
Background of the Rules
The rules, introduced in 2010, were designed to stop large grocery retailers from using land agreements to hinder competition. Currently, they apply to seven major retailers: Asda, Co-op, Marks and Spencer, Morrisons, Sainsbury's, Tesco, and Waitrose.
CMA's Provisional Decision
In its provisional findings, the CMA stated that Aldi, Lidl GB, and Lidl NI should also be covered by these restrictions. Aldi holds a 10.8% market share, making it the UK's fourth largest grocer, while Lidl is sixth with an 8.8% share, according to recent Worldpanel figures. Both companies have expanded rapidly through new store openings and have attracted shoppers with their discount pricing.
The regulator noted that the brands were originally excluded due to their limited product range, but they now warrant inclusion after expanding their store estates and opening larger outlets. The CMA is seeking further views before making a final decision.
Reactions from Aldi and Lidl
Juliette Enser, executive director of competition enforcement and markets at the CMA, said: "We want everyone to have the best choice of supermarket and range of prices when buying their groceries. To ensure this happens, we put rules in place to prevent big supermarket chains blocking rival stores from opening nearby – and now we propose applying those rules to Aldi and Lidl too."
An Aldi spokesperson responded: "The CMA's provisional decision does not impact our long-term growth plans across the UK. We remain firmly committed to opening hundreds of new stores across the country, bringing Aldi's unbeatable value and award-winning quality to even more customers."
A Lidl spokesperson added: "We note the CMA's provisional decision regarding our status under the Controlled Land Order. As a discounter, we have always welcomed and embraced competition within the market and our focus remains on continuing to open new stores and bringing our high-quality, lowest-priced groceries to even more communities. Any outcome will not impact our steadfast momentum and growth."
