German grocers Aldi and Lidl will be regulated under the same property rules in the U.K. as rivals like Tesco and Asda after the country's competition watchdog designated them as large grocery retailers.
The Competition and Markets Authority said Thursday that Aldi, Lidl GB and Lidl NI will be covered by the same land agreement rules as the U.K.'s other large supermarkets, which seek to prevent retailers from making it difficult for rivals to open up shops nearby. The rules already apply to Asda, Co‑op, Marks & Spencer, Morrisons, Sainsbury's, Tesco and Waitrose, the CMA said.
Under the rules, which came into effect in 2010, large grocery retailers are told not to include restrictive covenants in land agreements. The CMA also said it can look at existing contracts at the request of landowners, developers and rivals.
A Lidl GB spokesperson said that the CMA's decision will not impact its growth. "As a discounter, we have always welcomed and embraced competition within the market," they said.
"The CMA's decision does not change our commitment to invest in the UK and work towards our long-term ambition of 1,500 stores," an Aldi spokesperson said.
The no-frills grocers have continued to expand globally as high food inflation and higher energy costs draw shoppers to seek deals. The Office for National Statistics said on Wednesday that consumer prices rose 3.5% in September compared with a year earlier, up from 3.1% growth in August.
Aldi now holds around 10.5% of the U.K. grocery market, according to statistics from Worldpanel by Numerator, making it the U.K.'s fourth biggest supermarket behind Asda, Sainsbury's and Tesco. Lidl's market share in the U.K. also rose to 8.6% in the 12 weeks to Oct. 4, up from 8.2% the previous year, according to the research group, putting it ahead of Morrisons' 8.3% share. U.K. officials found in 2008 that Aldi and Lidl held just 1.3% and 1.5% of U.K. grocery sales respectively, according to a CMA filing.
Aldi said in September that it plans to invest 900 million pounds ($1.21 billion) next year in 40 new U.K. stores and improve its distribution network. Lidl also announced plans in April to open 50 new stores in the U.K. over 12 months as part of a roughly 600 million pound investment in the country.
The watchdog provisionally found in August that Aldi and Lidl could come under the scope of the rules. It said at the time that the companies provided evidence in 2025 which showed they held some land agreements that included relevant restrictions under the rules.
"Waitrose has encountered, first hand, restrictions secured by Lidl which restrict the ability of other grocery retailers to open new stores and shield Lidl from local competition," Waitrose said in its own response to the CMA's provisional decision. Iceland said in its own response that the budget grocers' business model, strategy and scale have evolved materially since the U.K.'s land order rules came into force.
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