Aldi and Lidl face allegations of leveraging outdated property regulations to hinder competitors from launching new retail outlets. Sainsbury’s, Morrisons, and Iceland have called on the competition watchdog to broaden the application of the Controlled Land Order. This order prohibits major grocery chains from imposing land restrictions that prevent rivals from establishing nearby stores.
Sainsbury’s, Morrisons, and Iceland advocate for Aldi and Lidl to be reclassified as “big grocery retailers” due to their significant expansion in recent years, rather than being labeled as “limited assortment discounters.” Introduced in 2010, the rules primarily affect prominent supermarket chains like Tesco, Morrisons, Sainsbury’s, and Asda.
Initially excluded due to their smaller size, Aldi and Lidl’s market share has surged from under 3% to approximately 20% today. Despite this, Aldi argues against a classification change, emphasizing its strategy of consistently offering lower prices through a limited product range.
Aldi aims to reach 1,500 stores from the current 1,050, while Lidl plans to expand to 1,100 shops by 2025 from over 1,000 locations. The Competition and Markets Authority (CMA) is set to deliver an initial decision in July.
In responses submitted to the watchdog’s consultation, Sainsbury’s highlighted the need to address the unequal ability of Aldi and Lidl to impede competition compared to other retailers. Richard Walker, executive chairman of Iceland Foods, echoed this sentiment, advocating for equal regulatory treatment for market players.
Morrisons emphasized the necessity of including Aldi and Lidl in the Controlled Land Order to ensure fair competition within the UK Groceries Sector. Aldi clarified in its submission to the CMA its operational focus on smaller stores and limited offerings, distinct from traditional supermarkets.
Efforts to contact Lidl for input on the matter are ongoing.
