The Competition and Markets Authority (CMA) has provisionally decided that Aldi and Lidl should be subject to the same rules as the UK’s biggest supermarket chains.
The German discount supermarkets have previously been excluded from a 2010 ban on restrictive covenants and exclusivity arrangements.
The order is designed to stop large grocery retailers (LGRs) from using land agreements to make it harder for rival supermarkets to open nearby.
The order currently applies to seven grocery retailers: Asda, Co‑op, Marks & Spencer, Morrisons, Sainsbury’s, Tesco and Waitrose.
Following a review earlier this year, the CMA believes Aldi and Lidl should now be covered by the order because of the scale and geographic coverage of their stores, their full range of groceries and their procurement model.
However, no final ruling will be made until the autumn, following a period of consultation.
“We want everyone to have the best choice of supermarket and range of prices when buying their groceries,” said Juliette Enser, executive director of competition enforcement and markets at the CMA.
“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.
“This is about allowing shoppers to choose where they spend their money and levelling the playing field for all major supermarkets.”
When the order was made in 2010, Aldi’s and Lidl’s UK stores were excluded from its scope as ‘limited assortment discounters’, selling a significantly more limited range of groceries than the LGRs at a low price.
But today, Aldi and Lidl operate larger grocery stores – those with a shopfloor area of more than 10,000 sq ft – throughout Great Britain and Northern Ireland, carry a full range of groceries even though they may offer less choice within some categories than some existing LGRs, and purchase groceries directly from suppliers through an integrated grocery wholesaling function.
In Property Week‘s analysis in May, one expert claimed that such a ruling from the CMA would dampen Aldi’s and Lidl’s ambitious expansion plans, while another claimed it would “level the playing field”.
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