British supermarkets want to rein in the expansion of Aldi and Lidl

The strong growth of Aldi and Lidl in the UK is causing concern among the major supermarket chains: Sainsbury’s, Morrisons, and Iceland are calling on the competition regulator to amend real estate regulations that they claim give the discounters an unfair advantage.

Level playing field

The fact that Aldi and Lidl’s combined market share in the UK has now risen to around 20% is clearly not to the liking of the country’s larger traditional supermarket chains. They have asked the Competition and Markets Authority (CMA) to amend the licensing rules regarding the expansion of supermarket chains, reports The Times.

Currently, the two German chains are classified as “discounters with a limited product range,” which means they are not required to meet certain conditions that do apply to large supermarkets such as Tesco, Sainsbury’s, Morrisons, Asda, and Waitrose. That exemption was originally intended to support emerging players. The initiators are now calling for a level playing field: they want Aldi and Lidl to be considered major supermarket chains from now on because they currently enjoy an unfair advantage in their expansion plans.

The authority is now investigating whether Aldi and Lidl meet the criteria to be classified as large food retailers. In a response, Aldi argues that its lower prices are only possible thanks to a limited product range, smaller stores, and a simpler business model. The company emphasizes that it does not offer e-commerce, click-and-collect, or home delivery, and does not have amenities such as butcher or fish departments, pharmacies, cafés, 24-hour stores, or tobacco or newspaper sales.