A rival can lose before the doors open
A supermarket can offer low prices and still have a reason to keep another supermarket away. Those two things are compatible: winning customers today does not remove the attraction of facing fewer competitors tomorrow.
On 22 October 2026, the Competition and Markets Authority confirmed that Aldi Stores Limited, Lidl Great Britain Limited and Lidl Northern Ireland Limited would be designated under the UK’s Groceries Market Investigation (Controlled Land) Order 2010. The two Lidl businesses are separate legal entities, so both are covered. The decision extends rules already applied to seven major grocery retailers.
The change concerns specified land agreements. It does not set grocery prices, require a particular shop to open, or establish that every agreement held by these companies breaks the rules. To understand what it does, follow an imaginary plot of land rather than a basket of shopping.
Selling the land while keeping a say
In our fictional example, Budget Basket owns a supermarket and the neighbouring plot. It sells the plot to a developer with a condition: the land cannot be used for grocery retailing.
The developer may be happy to agree because it plans an office building. Years later, a different business wants to put a supermarket there. It can afford the site and thinks customers would use it. Yet the restriction can stand between that business and an opening.
This is the problem illustrated by a restrictive covenant. Ownership has changed, while a restriction benefiting the existing supermarket remains attached to the use of the land. The supermarket can receive the sale proceeds without accepting a grocery rival next door.
There is a second route. Suppose Budget Basket rents a unit in a shopping centre and obtains a promise from the landlord not to let another unit to a competing grocery store. That is an exclusivity arrangement. The supermarket need not own the neighbouring premises; the landlord’s agreement can restrict who trades there.
These examples explain mechanisms, not allegations about a particular Aldi or Lidl contract.
Why a spare site is not always a substitute
Imagine that the rival is offered another plot several miles away. On a map, that may look like an answer. For a shopper without a car, it may be no alternative at all. A site that cannot accommodate deliveries, is too small, or lacks the necessary permission may also be commercially useless.
The relevant comparison is therefore between suitable places a business can realistically use. A contract affecting one well-positioned plot may matter more than a long list of unsuitable vacant ones.
New Zealand’s Commerce Commission independently describes the same economic mechanism: land covenants can raise barriers to entry or expansion and stop rivals competing effectively. Its guidance concerns New Zealand law, which is separate from the UK Order. The shared point is economic: controlling access to premises can protect a business from competition without improving its own offer.
Suppose Budget Basket charges £50 for a basket and a prospective rival believes it can offer a comparable one for £48. Entry lets shoppers test the claim and the incumbent respond. A restriction that prevents the rival opening prevents that competitive test. The prices and £2 difference are invented illustrations, not estimates of what the CMA decision will save shoppers.
What the Order restricts
The Order prohibits designated retailers from entering specified new restrictive covenants that may restrict grocery retailing, subject to exceptions. Its treatment of exclusivity is different: broadly, new arrangements cannot be enforced beyond five years from the benefiting store’s opening. Signing another contract does not simply restart that clock.
The exceptions matter. Some restrictions can preserve supporting land as a car park, access road or service yard. Other provisions address particular residential and planning circumstances. A ban on a supermarket being built across its delivery access is not equivalent to an unrestricted right to exclude nearby competitors.
Equally, five years is not a guarantee that every shorter clause is lawful under all competition law. Whether a particular agreement is prohibited depends on its terms and circumstances. The Order is a specific remedy, not a substitute for examining the actual document.
Why Aldi and Lidl were added
When the Order was introduced, Aldi and Lidl were treated as limited assortment discounters. The CMA’s final report concludes that they now meet the criteria for designation, assessing their grocery ranges, larger stores, geographic reach and direct purchasing from suppliers. Their continuing low prices did not settle the classification question.
The distinction is between having fewer versions of a product and being unable to provide the range needed for a main grocery shop. A chain can retain a focused assortment while competing for much of the same shopping as the retailers already covered.
That is a classification under this Order. It does not require Aldi or Lidl to copy another supermarket’s range, abandon discounting, or charge more.
An old agreement needs its own answer
The CMA says interested landowners, developers and competing supermarkets can request review of existing restrictions. Designation does not automatically erase every old agreement. The applicable process and, where relevant, the competition test still matter.
The final report also states that the CMA had not carried out a detailed assessment of these businesses’ agreements against the Order. That limit is important: extending obligations is a different finding from proving a particular breach.
For shoppers, the practical question is what happens after a barrier is removed. A prospective operator still needs finance, permission, workable premises and enough customers. Removing a covenant does not order refrigerators or recruit staff. Nor does a newly available site demonstrate an immediate fall in food bills.
The decision gives competition more room to occur. Whether a new shop follows, and whether its appeal is price, range, convenience or something else, remains to be seen. The useful thing to watch is an actual change in available choices, not an assumed saving that has already been spent in the headline.
