Leeds-based supermarket chain Morrisons has sparked a heated debate in the retail sector, accusing German discounters Aldi and Lidl of benefiting from a 'rigged' system. The claims come as Sainsbury's, Morrisons, and Iceland join forces to urge the competition watchdog to crack down on Aldi and Lidl's ability to block rival store openings.
According to Morrisons, Aldi and Lidl's business model relies heavily on a system that allows them to block competitors from opening stores in prime locations. This, they argue, creates an uneven playing field that disadvantages traditional UK supermarkets.
The row has significant implications for the UK retail sector, with Aldi and Lidl's market share steadily increasing over recent years. In 2022, Aldi and Lidl accounted for 14.4% of the UK grocery market, up from 11.1% in 2018, according to data from Kantar Worldpanel. Sainsbury's, meanwhile, saw its market share decline to 15.1% in 2022, down from 16.3% in 2018.
While Aldi and Lidl's expansion has been driven by their ability to offer low prices and efficient store operations, the pressure on traditional UK supermarkets is mounting. Morrisons, which has reported declining profits in recent years, has been vocal in its criticism of the competition landscape. 'We believe that the rules are being rigged in favour of the discounters,' said a Morrisons spokesperson.
The Competition and Markets Authority (CMA) has acknowledged the growing tensions in the UK retail sector, with a spokesperson stating that they are 'aware of concerns about the impact of discounters on the high street'. The CMA has promised to investigate the matter further, but it remains to be seen whether they will take action to address the concerns of Morrisons and its fellow supermarket chains.