Aldi and Lidl are under scrutiny for leveraging outdated property regulations to impede competitors from establishing new stores. Major grocery chains like Sainsbury’s, Morrisons, and Iceland are advocating for an extension of the Controlled Land Order. This order prohibits large grocery retailers from imposing restrictions on their land to hinder rivals from opening nearby stores.
Sainsbury’s, Morrisons, and Iceland are pressing for Aldi and Lidl to be classified as “large grocery retailers” due to their significant expansion in recent years, rather than their current designation as “limited assortment discounters.” Introduced in 2010, the rules primarily impact major supermarket chains such as Tesco, Morrisons, Sainsbury’s, and Asda.
Initially excluded due to their smaller size, Aldi and Lidl have seen their market share surge from less than 3% to approximately 20% today. Aldi contends that its classification should remain unchanged, citing its strategy of consistently offering lower prices achievable by limiting product range.
With around 1,050 stores and a goal of reaching 1,500 branches, Aldi is firm on its stance. Meanwhile, Lidl, with over 1,000 sites, aims to expand to 1,100 stores by 2025. The Competition and Markets Authority (CMA) is set to reach a preliminary decision in July.
In responses to the watchdog’s consultation, Sainsbury’s emphasized the need for fair competition by addressing the unequal ability of Aldi and Lidl to restrict entry and expansion in local markets compared to other retailers. Richard Walker, executive chairman of Iceland Foods, echoed this sentiment, emphasizing the importance of equal rules for market players.
Morrisons advocated for enlarging the scope of the Controlled Land Order to encompass Aldi and Lidl to maintain equilibrium in the UK Groceries Sector. Aldi, in its submission to the CMA, highlighted its operational differences, such as not offering ecommerce, click and collect services, or certain products and services available in traditional supermarkets.
The Mirror has reached out to Lidl for their comments on the matter.