Aldi and Lidl GB and Lidl NI face provisional CMA rules under the Groceries Market Investigation (Controlled Land) Order 2010, after the Competition and Markets Authority said on Friday they should be treated like the UK’s biggest supermarket chains. The change would bring the budget grocers into land-agreement rules already applied to seven retailers, including Asda, Co-op, Marks and Spencer, Morrisons, Sainsbury’s, Tesco and Waitrose.
Friday’s provisional CMA view
The CMA said the Order is designed to stop Large Grocery Retailers from using land agreements to make it harder for rival supermarkets to open nearby, in particular through restrictive covenants and exclusivity arrangements. Juliette Enser, Executive Director of Competition Enforcement and Markets at the CMA, said: “We want everyone to have the best choice of supermarket and range of prices when bu”.
The authority said its provisional view follows set criteria and turns on the scale and geographic coverage of Aldi, Lidl GB and Lidl NI stores, their full range of groceries and their procurement model. In practice, that points to the rules that already bind other major chains: if the final decision follows the same path, the three retailers would face the same land-agreement constraints when they look for new sites in Great Britain and Northern Ireland.
2010 exclusion no longer fits
In 2010, Aldi and Lidl were excluded when the Order was made because they were classed as limited assortment discounters. The CMA now says they no longer qualify under that category, even though each operates larger grocery stores with a shopfloor area of more than 1,000 square metres throughout either Great Britain or Northern Ireland and each carries a full range of groceries.
The regulators’ own wording leaves a narrow but important distinction: Aldi, Lidl GB and Lidl NI may still offer less choice within some categories than some existing Large Grocery Retailers, yet the CMA says their store format and buying model now look closer to the chains already covered by the Order. Each purchases groceries directly from suppliers through an integrated grocery wholesaling function.
Further views before final call
The CMA is now seeking further views before a final decision, so the practical question for the three retailers is whether the provisional view becomes the rule that governs future store openings. The underlying market is large — estimated at £215 billion — and Aldi and Lidl’s market shares place them among the top 5 retailers according to various sources, which is why the boundary of the Order matters beyond the chains themselves.
Will the CMA ultimately designate Aldi, Lidl GB and Lidl NI as Large Grocery Retailers under the Order? That is the decision that would settle whether their land deals face the same limits already imposed on the seven retailers inside the regime.
