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The Competition and Markets Authority (CMA) is reportedly considering an overhaul of rules that currently restrict major supermarkets from opening new stores in areas dominated by Aldi and Lidl, The Telegraph has reported.
The regulator’s current “restrictive” land clauses mean supermarkets must allow rival stores to open nearby without opposition in order to protect competition for shoppers.
However, the order only applies to Tesco, Sainsbury’s, Morrisons, Asda, Waitrose, Marks and Spencer and Co-op, while Aldi and Lidl are exempt.
Under the regulations, the seven other supermarkets are blocked from having contractual clauses in their store deals which would prevent competitors from having stores in the same area.
All of them have been forced to review contracts to comply with the order to allow shoppers to have more choice and “so benefit from a wider range of groceries and access to cheaper prices”, according to the CMA.
However, supermarket bosses have become “increasingly frustrated” over the “unfair playing field” with Aldi and Lidl.
The German discounters are not subject to the same restrictions due to the fact they had a very small UK presence when the order came into force in 2010.
Since then, Aldi has overtaken Morrisons to become the fourth largest grocer, while Lidl is the sixth, and together they hold almost a fifth of the grocery market.
Retail bosses claim Aldi and Lidl are now implementing these same restrictive clauses to block competitors from opening nearby stores on retail parks.
The CMA has reportedly told supermarket bosses that it is now reviewing the restrictions and is “aware of their frustration”.
Officials have reportedly been asked to consider whether the rules should now include Aldi and Lidl in light of their growth since 2010, or whether they should remove the bans for all supermarkets.
Insiders told The Telegraph they were “hopeful” that the CMA would decide to axe the restrictions altogether.
A CMA spokesman told The Telegraph: “The Groceries Market Investigation (Controlled Land) Order plays an important role in maintaining competition between supermarkets, which is crucial to the finances of families across the country.
“We are aware of concerns that the order should cover more supermarkets, due to changes in the groceries sector, and we always keep this under review to ensure a level playing field.”
Aldi and Lidl have been contacted for comment.
