The discounters built their UK empires under a different set of rules. Now the CMA wants to put Aldi and Lidl on the same footing as Tesco, Sainsbury’s and Asda.
Aldi and Lidl have spent years transforming the UK supermarket market, growing rapidly from discount operators into two of the country’s biggest grocery chains.
Now the rules governing where supermarkets can open are set to change.
The Competition and Markets Authority (CMA) has proposed extending existing supermarket land agreement restrictions to Aldi and Lidl — removing an exemption that has applied to the two German-owned discounters because they were classified as limited-assortment supermarkets.
What was different before?
Under the existing framework, major supermarket groups including Tesco, Sainsbury’s and Asda are subject to restrictions designed to prevent them using property agreements to make it difficult for competitors to open stores nearby.
Aldi and Lidl were not covered by those same restrictions.
Their status as limited-assortment discounters meant they were treated differently from the larger full-range supermarket operators.
That distinction has become increasingly difficult to justify as the two chains have expanded.
Aldi is now the UK’s fourth-largest grocery retailer, while Lidl is fifth. Their store networks have grown substantially and both have become major competitors for mainstream supermarket shoppers.
The playing field is changing
The CMA’s argument is straightforward: if Aldi and Lidl are now major national supermarket operators, they should face the same rules as their larger competitors.
The proposed change is aimed at preventing restrictive land agreements from being used to limit competition.
In practical terms, the new rules could make it harder for Aldi or Lidl to enter into property arrangements that prevent another supermarket from opening close to one of their stores.
It does not, however, amount to a ban on expansion.
Both Aldi and Lidl have indicated that the proposed changes are not expected to derail their growth plans.
From disruptors to supermarket giants
The development highlights just how dramatically the UK grocery market has changed.
Aldi and Lidl once competed from the edge of the supermarket sector, offering a relatively small range of products at aggressively low prices.
Today, they are among the country’s most important grocery retailers.
Their success has forced the traditional supermarkets to respond with lower prices, discount ranges, loyalty schemes and stronger price competition.
The CMA’s latest move effectively recognises that transformation.
The discounters may still operate a different retail model, but when it comes to their size, national reach and influence over shoppers, they are no longer small players.
The proposed changes are currently subject to consultation, with a final decision expected later in the year.
The message from the competition regulator is becoming clear: Aldi and Lidl may have started as discounters, but they are now big enough to play by the same rules as Britain’s biggest supermarkets.