Aldi and Lidl are facing accusations of leveraging outdated property regulations to impede competitors from establishing new outlets. Sainsbury’s, Morrisons, and Iceland are advocating for an extension of the Controlled Land Order to encompass Aldi and Lidl as “large grocery retailers” given their substantial growth in recent years, rather than their current classification as “limited assortment discounters.”
Initially implemented in 2010, the rules primarily affect major supermarket chains such as Tesco, Morrisons, Sainsbury’s, and Asda. While Aldi and Lidl were not included initially due to their smaller size, other supermarkets contend that their market share has surged from under 3% to approximately 20% presently.
However, Aldi contends that its designation should remain unchanged as it maintains consistently lower prices achievable by limiting its product range. With Aldi operating around 1,050 stores aiming for 1,500 branches and Lidl having over 1,000 sites with plans to expand to 1,100 shops by 2025, the Competition and Markets Authority (CMA) is anticipated to deliver an initial verdict in July.
In response to the watchdog’s consultation, Sainsbury’s emphasized that competition is distorted by the unequal ability of Aldi and Lidl, the fourth and fifth largest grocery retailers in the UK, to impede the entry and expansion of competitor stores. Iceland Foods’ executive chairman, Richard Walker, underscored the need for a level playing field, stating that the same regulations should apply to market powers of similar types.
Morrisons echoed this sentiment by highlighting the necessity of including Aldi and Lidl within the Controlled Land Order to ensure fair competition within the UK Groceries Sector. Aldi, in its submission to the CMA, outlined its operational limitations, underscoring the absence of various services and smaller store sizes compared to traditional supermarkets.