Supermarket chains Sainsbury's, Morrisons, and Iceland have called on the UK's competition watchdog to expand the scope of the Controlled Land Order to include discount retailers Aldi and Lidl. The current regulations, introduced in 2010, prevent large grocery retailers from imposing restrictions on their land to block competitors from opening nearby stores. However, Aldi and Lidl are currently exempt, classified as "limited assortment discounters."
Market Share Growth Sparks Controversy
At the time the rules were implemented, Aldi and Lidl held less than 3% of the UK grocery market. Today, their combined share has surged to approximately 20%, prompting rival supermarkets to argue that the exemption is no longer justified. Aldi operates over 1,050 stores with plans to reach 1,500, while Lidl has more than 1,000 outlets and aims for 1,100 by the end of 2025. The Competition and Markets Authority (CMA) is expected to issue a preliminary decision in July.
Sainsbury's Position
In its written response to the CMA consultation, Sainsbury's stated: "Competition is currently distorted by the asymmetric ability of Aldi, the fourth largest grocery retailer in the UK, and Lidl, the fifth largest grocery retailer in the UK, to restrict entry and expansion by competitor grocery retailers in local markets, while equivalent restrictions apply to other retailers of comparable or smaller scale."
Iceland's View
Richard Walker, executive chairman of Iceland Foods, said: "Our position is simple: the same rules should apply to the same type of market power. It would be neither rational nor reasonable for Aldi and Lidl to be allowed to wriggle out of this. If land restrictions can prevent rival grocers from opening near customers, then that matters for competition, choice and prices, especially in communities where household budgets are already under pressure."
Morrisons' Argument
Morrisons echoed these sentiments in its statement: "Morrisons considers that expanding the scope of the Controlled Land Order to include Aldi and Lidl is necessary to ensure a level playing field within the UK Groceries Sector."
Aldi's Defence
Aldi, however, argues that its classification should remain unchanged. In its submission to the CMA, the discounter highlighted its limited service model: "We do not operate ecommerce, click and collect or home delivery services, butchery or fishmonger counters, delicatessens, pharmacies, opticians, cafés or 24-hour stores. We do not sell tobacco products or newspapers. Our stores are significantly smaller, with a standard net sales area of approximately 1,230 square metres." The Mirror has contacted Lidl for comment.
