The Competition and Markets Authority (CMA) has announced that Aldi and Lidl will be subject to the same rules as other major supermarkets to prevent them from blocking rival stores from being built. The watchdog said including the German discounters in the same land agreement rules as competitors such as Tesco and Sainsbury's will help "to ensure customers get the best choice of where to shop".
Designation as Large Grocery Retailers
On Thursday, the CMA said it will designate Aldi, Lidl GB and Lidl NI as "large grocery retailers" under current industry rules. These rules have applied to Asda, Co-op, Marks and Spencer, Morrisons, Sainsbury's, Tesco and Waitrose since 2010.
The rules were introduced to stop large grocery chains from using land contracts to make it harder for rivals to open nearby, particularly through restrictive covenants and exclusivity arrangements.
Market Position and Expansion Plans
Aldi is currently the UK's fourth largest supermarket chain, with a 10.5% share of the grocery market, while Lidl is the fifth largest, with an 8.6% share, according to recent data from Worldpanel by Numerator.
Both Aldi and Lidl stressed that the move will not affect their continued store expansion programmes across the UK. The announcement comes two months after the CMA first suggested the discount chains should come under the same rules as their rivals.
Reactions from the CMA and Retailers
Juliette Enser, executive director for competition enforcement and markets at the CMA, 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."
An Aldi spokeswoman said: "The CMA's decision does not change our commitment to invest in the UK and work towards our long-term ambition of 1,500 stores, bringing high-quality, affordable food to more communities, while ensuring that we comply with any relevant obligations under the Controlled Land Order. We will invest a record £900 million next year in 40 new stores and continued improvements to our distribution network."
A Lidl spokesman said: "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. The CMA's decision regarding our status under the Controlled Land Order will not impact our steadfast momentum and growth."
