The UK's competition watchdog has provisionally found that Aldi and Lidl should be covered by the same land agreement rules as the country's largest supermarket chains. The Competition and Markets Authority (CMA) proposal would prevent the German discount brands from blocking rival supermarkets from opening stores close to theirs.
Background of the rules
Rules designed to stop large grocery retailers from using land agreements to hinder rival supermarkets from opening nearby, particularly through restrictive covenants and exclusivity arrangements, were introduced in 2010. These restrictions currently apply to seven retailers: Asda, Co-op, Marks and Spencer, Morrisons, Sainsbury's, Tesco, and Waitrose.
In a provisional decision, the CMA said it believes Aldi, Lidl GB, and Lidl NI should also be subject to these rules. Aldi is the UK's fourth largest grocer with a 10.8% market share, and Lidl the sixth largest with an 8.8% share, according to recent figures from Worldpanel.
Expansion and impact
Both companies have rapidly expanded through store openings in recent years and have attracted new shoppers with their discount pricing. The regulator noted that the brands were not originally included in the rules due to their more limited product range, but they should now be covered after expanding their shop estate and opening larger stores.
The CMA has said it is seeking further views before reaching a final decision. 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 spokesman said: "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." Lidl has been contacted for comment.
