Supermarkets including Sainsbury's, Morrisons and Iceland have accused German discounters Aldi and Lidl of benefiting from a "rigged" system that distorts competition. The UK grocers are urging the Competition and Markets Authority (CMA) to address a regulatory gap that allows the discounters to block rivals from opening new stores on nearby land.
Regulatory gap favours discounters
Because Aldi and Lidl are classified as "limited assortment discounters" rather than "large grocery retailers," they can prevent larger competitors from opening stores nearby. In contrast, Tesco, Morrisons, Asda and Waitrose cannot block other large supermarkets from setting up shop due to their classification. Sainsbury's warned that this asymmetry could enable Aldi and Lidl to grow market share faster.
Pressure on CMA intensifies
Sainsbury's wrote to the CMA, stating there is a "serious risk" that competition is being made "less effective" by these property rules. Iceland boss Richard Walker previously described the system as "rigged" in favour of Aldi and Lidl. Morrisons argues for a "level playing field," noting that the German discounters can "no longer notably be described as being 'at a low price'" as other grocers have matched them.
Aldi defends its position
Aldi insists it is smaller than competitors, highlighting that it does not operate ecommerce, click and collect, home delivery, butchery, fishmonger, delicatessen, pharmacy, optician, café or 24-hour stores. It also does not sell tobacco or newspapers, and its stores are significantly smaller, with a standard net sales area of approximately 1,230 square metres. Both Aldi and Lidl have faced planning delays in their expansion efforts, and a ruling against them could be a further setback. The CMA is expected to announce a provisional decision in July.
