Two major supermarket chains could be banned from blocking rival stores opening nearby

Aldi and Lidl could be banned from preventing rival supermarkets opening near their stores under new rules proposed by the competition watchdog.

The shake-up is intended to give shoppers greater choice and access to more competitive grocery prices in their local area.

The Competition and Markets Authority (CMA) has provisionally decided that the German-owned discount chains should follow the same land agreement rules as Britain's largest supermarkets.

The proposal would prevent Aldi and Lidl from using restrictive property agreements to make it harder for competitors to open stores nearby.

The rules were introduced in 2010 and already apply to Asda, the Co-op, Marks and Spencer, Morrisons, Sainsbury's, Tesco and Waitrose.

Aldi and Lidl were originally excluded because they offered a more limited range of products at the time.

However, the CMA believes the discounters should now be included after both significantly expanded their store networks and began opening larger shops.

The watchdog is seeking further views before making a final decision.

According to recent Worldpanel data, Aldi now ranks as the UK's fourth largest grocer with a 10.8 per cent market share, while Lidl sits in sixth place at 8.8 per cent.

Both chains have drawn increasing numbers of customers through their low-price model, fuelling rapid expansion across the country.

Juliette Enser, the CMA's executive director of competition enforcement and markets, said: "We want everyone to have the best choice of supermarket and range of prices when buying their groceries.

"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."

Neither retailer indicated that the provisional ruling would derail their ambitions.

An Aldi spokesman said: "The CMA's provisional decision does not impact our long-term growth plans across the UK.

"We remain firmly committed to opening hundreds of new stores across the country, bringing Aldi's unbeatable value and award-winning quality to even more customers."

A Lidl spokesman said: "We note the CMA's provisional decision regarding our status under the Controlled Land Order.

"As a discounter, we have always welcomed and embraced competition within the market and our focus remains on continuing to open new stores and bringing our high-quality, lowest-priced groceries to even more communities.

"Any outcome will not impact our steadfast momentum and growth."