UK Supermarket Land Rules Set to Cover Aldi and Lidl as Store Plans Grow

A proposed change to UK supermarket land rules would bring Aldi and Lidl under restrictions already applied to major grocery chains. The Competition and Markets Authority (CMA) says their rapid growth means the two discounters should now be treated as large grocery retailers, despite their smaller product ranges. The decision matters because control over potential store sites can shape which supermarkets are able to compete in a local area.

The CMA confirmed its provisional decision on Thursday to extend the Controlled Land Order to Aldi and Lidl. The pair had been outside the rules because they were classified as “limited assortment discounters.” If the proposed change takes effect, they would join Asda, Co-op, Marks & Spencer, Morrisons, Sainsbury’s, Tesco and Waitrose under the same restrictions on land arrangements that can limit competitors’ access to sites.

The order is intended to prevent large grocery retailers from using land arrangements to make it harder for rivals to open nearby stores. In practice, a restriction tied to a site can affect more than one planned shop: it may narrow the locations available to competitors seeking to serve the same community. The CMA’s provisional view is that Aldi and Lidl’s growth has changed how their role in the market should be assessed.

Store growth puts the classification under pressure

Aldi and Lidl have argued that their narrower ranges distinguish them from larger supermarkets. But rivals say that measure misses how shoppers use the stores. Morrisons told the CMA that both chains promote their ranges as suitable for a full weekly shop and compete strongly even in categories they describe as weaker.

That disagreement goes to the heart of the classification. A limited range may set a discounter apart from a full-line supermarket, but it does not necessarily mean the store has a limited effect on nearby rivals. If customers can meet much of their weekly grocery needs there, the chain may compete for the same shoppers and sites as a broader-range operator.

Morrisons, Waitrose and Iceland have also pointed to Aldi and Lidl’s stated ambitions to reach 1,500 stores each. Those plans indicate the scale of the potential expansion at issue, though the source material does not give a timetable for reaching that number. More stores could increase the importance of access to suitable locations, while the final effect on local choice will depend on where the chains open and how competing retailers respond.

Iceland, which is not covered by the order, supported the CMA’s provisional decision. In a letter published on Thursday, it said the existing rules let Aldi and Lidl use “problematic land arrangements […] at scale” and that these could have a “material adverse impact” on competition across the UK grocery market. Iceland added that the two chains held a relatively small share of the market when the order was established, but now exert “a significant and compelling degree of competitive influence.”

Rivals describe the local effects

Waitrose said it had seen Lidl use the land order to restrict other grocery retailers’ ability to open stores and shield itself from local competition. The company urged the CMA to put its decisions into effect without further delay, arguing that retailers should have equal opportunity to secure sites.

Those accounts reflect the commercial stakes for established grocers: site access can affect the pace and location of expansion, and restrictions may influence which operators can serve a particular catchment. The retailers’ letters present their concerns to the CMA; they do not, by themselves, establish how often such arrangements have prevented a rival from opening or quantify any effect on prices.

The CMA’s executive director for competition enforcement, Juliette Enser, said the rules would “help level the playing field” and support shoppers’ choice of products and prices in their area. That outcome is the regulator’s stated aim. Whether the change produces more store openings or different local pricing will depend on the sites involved and the retailers’ commercial decisions.

Expansion plans remain in place

Aldi and Lidl said in August that the proposed change would not slow their UK expansion. Aldi said it remained committed to opening hundreds of new stores across the country. Lidl likewise said its focus was on continuing to open stores and serving more communities.

The provisional decision therefore sets up a practical test: whether the two chains can keep pursuing their expansion plans while complying with restrictions that already apply to other major grocers. The CMA’s classification reflects the companies’ growth and market influence; the immediate measure of its impact will be how the rules affect access to future sites and the scope for competing supermarkets to open nearby.