Asda and Sainsbury’s ordered to end ‘anti-competitive’ property restrictions

The Competition and Markets Authority (CMA) found that Asda and Sainsbury’s were using “unlawful anti-competitive land agreements”, which imposed restrictions on property they own from being used by a competitor or stopped landlords from allowing rivals’ shops on land in the same block as an existing supermarket.  

The regulator found that Sainsbury’s breached the Groceries Market Investigation (Controlled Land) Order 2010 18 times between 2011 and 2019. Asda breached it 14 times over the same period.

Sainsbury’s has agreed to remove the outstanding restrictions from its land agreements while Asda has already removed them.

CMA executive director, markets and mergers David Stewart said: “Restrictions of this nature are against the law, cause real harm to shoppers and will not be tolerated. This is particularly important at a time when many families are struggling to pay their weekly grocery bills.

“With families under increasing pressure, it is even more critical that competition between supermarkets is helping people to get the best deal. This enforcement action today is part of our wider action to tackle the cost of living and ensure that families really benefit from more competition. 

“We recently stepped up our work to assess whether any failure in competition is contributing to grocery prices being higher and we will be updating on this next month.”  

The CMA said its action on land restrictions followed intervention on similar breaches by Tesco in 2020 for 23 breaches and Waitrose in 2022 for seven breaches. 

The CMA is separately assessing “whether any failure in competition is contributing to grocery prices being higher than they would be in a well-functioning market”.

So far it has “not seen evidence pointing to specific new competition concerns in the grocery sector, but it is important to be sure that weak competition is not adding to the cost of living”.