Aldi and Lidl are facing allegations of leveraging outdated property regulations to obstruct competitors from establishing new retail outlets. Sainsbury’s, Morrisons, and Iceland are calling on the competition authority to broaden the scope of the Controlled Land Order, which prohibits major grocery retailers from imposing land restrictions to impede competitors from opening nearby stores.
Advocates are pushing for Aldi and Lidl to be reclassified as “large grocery retailers” due to their substantial growth in recent years, challenging their current designation as “limited assortment discounters.” Initially implemented in 2010, the rules primarily affect prominent supermarket chains like Tesco, Morrisons, Sainsbury’s, and Asda.
Although Aldi and Lidl were excluded initially due to their smaller size, other supermarkets argue that their market share has surged from under 3% to approximately 20% today. However, Aldi contends that its classification should remain unchanged, emphasizing its consistent delivery of lower prices achievable through a limited product range strategy.
Aldi boasts around 1,050 stores with aspirations to reach 1,500 outlets, while Lidl, with over 1,000 locations currently, aims to expand to 1,100 shops by 2025. The Competition and Markets Authority (CMA) is anticipated to issue a preliminary determination in July.
In responses submitted to the watchdog, Sainsbury’s emphasized the need for a level playing field in the grocery sector, pointing out the disparity in market power favoring Aldi and Lidl. Iceland Foods’ executive chairman, Richard Walker, echoed similar sentiments, advocating for consistent regulations for comparable market players.
Morrisons also stressed the necessity of incorporating Aldi and Lidl within the Controlled Land Order framework to ensure fair competition within the UK grocery industry. In its submission to the CMA, Aldi highlighted its operational focus on lower prices and unique offerings, underscoring its distinct market approach and smaller store footprint.
The Mirror has reached out to Lidl for their perspective on the matter.
