UK watchdog eyes limits on Aldi and Lidl growth

The UK’s Competition and Markets Authority (CMA) has proposed designating Aldi and Lidl as Large Grocery Retailers (LGRs), a move that would subject the two discount chains to land use restrictions already applied to major supermarkets like Tesco, Sainsbury’s, and Asda.

What the change would mean

If confirmed, Aldi and Lidl would fall under the Groceries Market Investigation (Controlled Land) Order 2010. The order prohibits large grocery retailers from using land agreements—such as restrictive covenants or exclusivity clauses—to block competitors from opening stores nearby. The CMA says the change is intended to widen consumer choice by preventing dominant chains from limiting competition in local markets.

The CMA has opened a consultation, accepting submissions from stakeholders until 7 September 2026. A final decision is expected later this year.

Why Aldi and Lidl are now in scope

When the order was introduced in 2010, Aldi and Lidl were classified as limited assortment discounters (LADs), a category that exempted them from the restrictions. At the time, they were seen as niche players offering a narrower product range at lower prices than traditional supermarkets.

The CMA’s provisional assessment found that both chains no longer qualify for LAD status. The regulator pointed to three key factors: their stores now frequently exceed 1,000 square meters of shop floor space, they offer a broad grocery range (even if some categories have fewer options than larger rivals), and they source products directly through their own integrated wholesaling operations.

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Juliette Enser, the CMA’s competition enforcement and markets executive director, said the rules exist to ensure consumers have the best choice of supermarkets and prices. “To ensure this happens, we put rules in place to prevent big supermarket chains blocking rival stores from opening nearby—and now we propose applying those rules to Aldi and Lidl too.”

For shoppers, the shift might mean more options in areas where Aldi or Lidl dominate. But for the chains themselves, it could limit their ability to control the retail setting around their stores. Smaller competitors, or even larger rivals, could find it easier to move into spaces once effectively off-limits.

The proposal reflects how the grocery market has changed in the past 14 years. Aldi and Lidl have expanded aggressively, with Aldi now the UK’s fourth-largest supermarket by market share. Their growth has reshaped shopping habits, forcing traditional retailers to cut prices and rethink their own strategies. The CMA’s move suggests the regulator now sees them as part of the establishment, not the disruptors they once were.

The consultation remains open until September, with a final decision expected before the end of 2026.