Major supermarket war erupts as retailers call for crackdown on Aldi and Lidl amid claims of ‘rigged system'

Sainsbury’s, Morrisons and Iceland have urged the Competition and Markets Authority (CMA) to tighten land rules for Aldi and Lidl, arguing the current system gives the German discounters an unfair advantage.

The three supermarket groups want regulators to prevent Aldi and Lidl from using restrictive property covenants that can limit rival stores opening nearby.

The CMA introduced the Controlled Land Order in 2010 to stop major grocers from blocking competition through land agreements, including acquiring sites without developing them or adding clauses preventing future grocery use.

Aldi and Lidl were exempt at the time due to their status as limited‑assortment discounters, reflecting their smaller stores and reduced product ranges.

Iceland chief executive Richard Walker criticised the existing framework, saying it is “rigged in favour of the German retailers”.

Sainsbury’s said the exemption is now distorting competition, arguing Aldi and Lidl can restrict rivals’ expansion while other retailers of similar scale cannot.

Iceland and Morrisons both said the market has changed significantly since 2010, with more shoppers now doing their main weekly shop at discount chains.

Sainsbury’s warned the regulatory gap could allow Aldi and Lidl to expand more quickly than competitors.

Iceland added that distinctions between full‑range supermarkets and discounters are “no longer appropriate or reflective of market realities”.

Aldi defended its model, noting it does not operate online shopping, counters or 24‑hour stores, and said many areas still lack access to a local Aldi, leaving customers paying higher prices.

The retailer has around 1,050 UK stores and plans to open 40 more this year.

The CMA is expected to publish its final decision in September.

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The calls for tighter land rules come as food inflation continues to put pressure on households, with analysts warning prices could be 50 per cent higher by November than at the start of the cost‑of‑living crisis.

Research from the Energy and Climate Intelligence Unit shows staples such as pasta, eggs and beef have already surged by more than 50 per cent, intensifying competition between retailers.

Sainsbury’s, Morrisons and Iceland argue that rising grocery costs make fair market access even more important, particularly as lower‑income families feel the squeeze.

The supermarkets say ensuring a level playing field is essential as shoppers increasingly turn to discounters in search of cheaper essentials.