Britain's competition watchdog, the Competition and Markets Authority (CMA), has provisionally decided that Aldi and Lidl should be subject to rules preventing them from blocking rival supermarkets from opening nearby. These proposed regulations would apply to Aldi, Lidl GB, and Lidl NI, bringing them under the same framework as the UK's largest grocery retailers.
Since 2010, major supermarket chains such as Asda, Morrisons, Sainsbury's, and Tesco have been prohibited from including restrictive covenants in their land deals. These covenants historically served to prevent competing stores from establishing themselves in proximity to their outlets. Aldi and Lidl have been exempt from these rules because they were not classified as 'large grocery retailers' when the Groceries Market Investigation (Controlled Land) Order 2010 was established. Iceland, a frozen food retailer, also remains exempt.
The CMA's provisional view is that Aldi and Lidl now warrant inclusion due to their significant scale, broad geographic presence, comprehensive grocery offerings, and established procurement models. These factors place their market shares among the top five food and grocery retailers in the UK.
Juliette Enser, executive director of competition enforcement and markets at the CMA, stated that the aim is to ensure consumers have access to the best choice of supermarkets and a range of prices. "We want everyone to have the best choice of supermarket and range of prices when buying their groceries," Enser said. "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."
The CMA is currently seeking further input on whether Aldi, Lidl GB, and Lidl NI should be formally designated as large grocery retailers under the 2010 Order and thus be bound by the land agreement rules. A final decision was expected by the end of July but has not yet been published. Iceland Foods has welcomed the CMA's provisional conclusion, with a spokesperson stating, "Customers stand to benefit from greater local choice, stronger competition and a fairer grocery market, and we will engage fully with the consultation over the coming months."