Aldi and Lidl will no longer be able to block rival supermarket openings after becoming subject to the same rules as major grocers. The Competition and Markets Authority (CMA) decided that Aldi, Lidl GB and Lidl NI will be designated as ‘Large Grocery Retailers’ (LGRs), which the UK's main supermarkets, Asda, Co‑op, Marks and Spencer, Morrisons, Sainsbury’s, Tesco and Waitrose, have been bound to since 2010.
What the New Rules Mean
The order is designed to stop retailers from using land agreements to make it harder for rival supermarkets to open nearby, in particular through restrictive covenants and exclusivity arrangements. The CMA said it gives shoppers more choice about where and how much to pay for their groceries.
Juliette Enser, executive director for competition enforcement and markets at the CMA, said the change would help "level the playing field".
CMA Statement and Industry Support
They said: "We put in place rules to stop big supermarket chains from blocking rival stores opening in their area, and now those rules apply to Aldi and Lidl. This will help level the playing field and make sure shoppers get the best choice of products and prices in their area."
The changes coincide with rapid expansion by the discount retailers. While Aldi and Lidl were relatively small players in the UK in 2010, they now rank among the top five retailers by market share in the UK food and grocery market, collectively worth an estimated £222.7 billion.
Store Numbers and Impact
Lidl now has more than 1,000 stores across Britain, while Aldi has more than 1,050, up from 470 in 2012. In comparison, Tesco has around 3,010 shops and Sainsbury's operates more than 1,400.
Once a retailer is designated, it cannot include any prohibited restrictions in new agreements – and existing agreements can be reviewed by the CMA, on the request of interested landowners, developers, and rival supermarkets. This is the case for all designated supermarkets.
Morrisons, Waitrose and Iceland supported the CMA's proposal to designate Lidl and Aldi as LGRs. The CMA did not receive representations from Aldi, Lidl GB or Lidl NI.
