The Competition and Markets Authority (CMA) has provisionally decided that Aldi and Lidl should be subject to the same land agreement rules that already apply to major UK supermarkets like Tesco, Asda, Sainsbury's, and Morrisons. This decision follows a review of the Groceries Market Investigation (Controlled Land) Order 2010.
What the Order Does
The 2010 Order prevents 'Large Grocery Retailers' (LGRs) from using land agreements to hinder rival supermarkets from opening nearby. It specifically targets restrictive covenants and exclusivity arrangements. The CMA states these rules "ensure supermarkets compete freely – and ultimately ensure shoppers have more choice about where to buy, and how much to pay for, their groceries."
Currently, the Order applies to seven retailers: Asda, Co-op, Marks and Spencer, Morrisons, Sainsbury's, Tesco, and Waitrose. The CMA's provisional view is that Aldi, Lidl GB, and Lidl NI should now be included due to their store scale, geographic coverage, full grocery range, and procurement model.
Why Aldi and Lidl Were Previously Excluded
When the law was created in 2010, Aldi and Lidl were classified as 'limited assortment discounters' (LADs), selling a significantly more limited range of groceries at low prices. However, after reviewing current operations, the CMA has provisionally found they no longer qualify as LADs and should be considered LGRs.
The UK food and grocery market is estimated to be worth £215 billion, with Aldi and Lidl ranking among the top five retailers by market share, according to the CMA.
Reasons for the Provisional Decision
The CMA cited three main reasons for its provisional finding:
- Store footprint and geographic coverage: Each operates larger grocery stores (over 1,000 square metres) throughout Great Britain or Northern Ireland.
- Product range: Each carries a full range of groceries, though they may offer less choice in some categories than existing LGRs.
- Procurement model: Each purchases groceries directly from suppliers through an integrated wholesaling function.
Next Steps
The CMA is seeking further views on whether Aldi, Lidl GB, and Lidl NI should be designated as LGRs before making 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."
She added: "This is about allowing shoppers to choose where they spend their money and levelling the playing field for all major supermarkets. Today's proposals are provisional and we welcome views before deciding the best way forward." The CMA stressed that no final decision has been made and is inviting views by September 7.
