A new dispute is emerging in the UK grocery sector as major supermarket chains push regulators to close what they describe as a competitive loophole benefiting Aldi and Lidl.
Morrisons, Sainsbury’s and Iceland have called on the Competition and Markets Authority (CMA) to change property rules that currently allow the two discount retailers to use restrictive land agreements preventing rival supermarkets from opening nearby stores.(Sky News)
Under existing rules introduced through the Groceries Market Investigation Controlled Land Order, large grocery retailers are prohibited from using property clauses that block competing supermarkets from operating on adjacent sites. However, Aldi and Lidl are not currently classified as “large grocery retailers” under the regime and therefore remain exempt from the restrictions.
The issue has gained importance as Aldi and Lidl continue to expand their presence across the UK grocery market, increasing pressure on established supermarket groups. Traditional retailers argue that the exemption creates an uneven playing field by allowing the discounters to secure strategic locations while limiting local competition.
In submissions to the CMA, Sainsbury’s warned that the current framework risks weakening competition and reducing rivals’ ability to compete effectively against the growing discounters. Iceland similarly argued that the rules should apply equally across the sector to ensure fair competition conditions.
Morrisons also supported regulatory changes, noting that Aldi and Lidl’s pricing advantage has narrowed in recent years as larger chains expanded price-matching initiatives and discount campaigns.
The CMA is currently reviewing whether Aldi and Lidl should be brought within the scope of the land restriction rules, a move that could significantly affect future supermarket expansion strategies across the UK.
