UK’s authority orders Sainsbury, Asda  to allow rival grocers to open nearby

BLOOMBERG

The UK’s competition authority has ordered J Sainsbury Plc and Asda to stop using land agreements that prevent rivals opening nearby stores.
The move will benefit discount supermarkets Aldi and Lidl which are opening more outlets as they gain market share in the UK’s highly competitive grocery market.
Sainsbury and Asda, the UK’s second- and third-largest grocers, were found to be placing restrictions on land they own, stopping it from being used by rivals, or preventing landlords from allowing competing stores in the same block, according to a statement from the Competition and Markets Authority (CMA).
Both companies were found to have breached the regulator’s rules designed to encourage nearby competing stores.
The CMA called the behavior “unlawful” and said it “will not be tolerated.”
Aldi and Lidl are on the lookout for more sites and have advertised on their websites for shoppers to find appropriate spaces in return for a finder’s fee. Aldi is seeking to grow from roughly 990 stores in the UK to 1,200 by 2025 while Lidl is aiming for 1,100 stores by the end of that year.
The UK’s cost-of-living crisis is pushing consumers to visit the discount grocers and to buy supermarket own-brand goods rather than labels. Aldi overtook Morrisons as the UK’s fourth-largest supermarket last year and it was the fastest growing grocer in May with a 24% sales jump year-on-year, according to market research group Kantar. Lidl followed closely with a more than 23% increase while Sainsbury and Asda sales grew about 11% amid high inflation.
The regulator is also investigating whether supermarkets are failing to keep prices as low as possible, and will update on its probe next month.
Archie Norman, chairman of Marks & Spencer Group Plc, said the CMA hasn’t “got anything right for about three decades,” during a recent interview with Bloomberg Radio.