Sainsbury's, Morrisons and Iceland have asked the Competition and Markets Authority (CMA) to widen property rules that currently apply to large grocery retailers, according to multiple reports. The rules, under the 2010 Groceries Market Investigation Controlled Land Order, restrict how major chains can acquire and develop land to prevent anti-competitive practices. Currently, Aldi and Lidl are designated as 'limited assortment discounters', which has historically kept them outside these restrictions.
Sainsbury's warned there is a 'serious risk' competition is 'less effective than it could be', according to the company. The chain argued the discounters have an 'asymmetric ability' to restrict rival expansion in local markets. In a statement, Sainsbury's said: 'Competition is currently being distorted by the asymmetric ability of Aldi and Lidl to restrict entry and expansion by competitor grocery retailers in local markets, while equivalent restrictions apply to other retailers of comparable or smaller scale.'
Competition is currently being distorted by the asymmetric ability of Aldi and Lidl to restrict entry and expansion by competitor grocery retailers in local markets, while equivalent restrictions apply to other retailers of comparable or smaller scale.
Morrisons said widening the rules was needed to 'ensure a level playing field', according to the company. The chain argued that Aldi and Lidl's combined market share had risen from less than 3% when the rules were first drawn up to around 20% today. Morrisons also argued the German discounters could no longer be clearly described as uniquely 'low price' retailers, given price-matching schemes by larger rivals.
Aldi pushed back, insisting its classification should remain unchanged because its 'consistently' lower prices are 'only achievable' through a limited product range and simpler operating model, according to the company. Aldi said its prices are typically 15% to 21% lower than the 'big four' supermarkets. The discounter highlighted its limited services, stating: 'We do not operate ecommerce, click and collect or home delivery services, butchery or fishmonger counters, delicatessens, pharmacies, opticians, cafés or 24-hour stores.' Aldi also noted it does not sell tobacco products or newspapers, and its stores are significantly smaller, with a standard net sales area of approximately 1,230 square metres.
We do not operate ecommerce, click and collect or home delivery services, butchery or fishmonger counters, delicatessens, pharmacies, opticians, cafés or 24-hour stores.
The CMA is now considering whether Aldi and Lidl should be designated as Large Grocery Retailers under the order. The outcome of the review could affect the discounters' expansion plans, but the timeline for a decision remains unclear. It is also unknown whether other supermarkets support or oppose the reclassification.
We do not sell tobacco products or newspapers. Our stores are significantly smaller, with a standard net sales area of approximately 1,230 square metres.