The Competition and Markets Authority (CMA) has taken action to protect supermarket shoppers by securing agreements from Wm Morrison Supermarkets Limited (Morrisons) and Marks and Spencer plc (M&S) to stop using unlawful anti-competitive land agreements. These unlawful agreements include restrictions on land being used by a rival supermarket, or restrictions lasting five years or more that stop landlords from allowing competing stores to set up.
The CMA found that the retail giants, who respectively hold 8.6 per cent and 3.4 per cent market share in the UK's £188.1bn supermarket industry, breached the Groceries Market Investigation (Controlled Land) Order 2010. This was introduced to stop supermarkets imposing new restrictions that block rivals from opening competing stores nearby. By ensuring supermarkets compete freely, the CMA is ensuring that shoppers have more choice and so benefit from a wider range of groceries and access to cheaper prices - which is even more important as the cost of living rises.
The CMA found that:
- Morrisons breached the Order 55 times between 2011 and 2020
- M&S breached the Order 10 times between 2015 and 2019
Morrisons currently has the poorest compliance record with the Order that the CMA has seen to date. Although 14 of these restrictions have ended, there are an outstanding 41 restrictions that Morrisons has agreed to address. Likewise, 5 of M&S's restrictions have ended and it has agreed to address the remaining 5. The CMA has written to both supermarkets outlining the breaches and the actions agreed to improve compliance in the future.
Adam Land, Senior Director of Remedies Business and Financial Analysis at the CMA said:
At a time when the weekly shop is a source of financial pressure for many families, it's crucial that competition between supermarkets is working well to help people get the best deals they can.
These restrictive agreements by our leading retailers are unlawful. There can be no excuses made for non-compliance with an Order made in 2010, especially when we know the positive impact for shoppers of new stores on the high street.
Our continued crackdown on these unlawful restrictions is part of our wider action to tackle the cost of living and ensure that people benefit from more competition and choice.
Today's action is part of a targeted programme of activity by the CMA to enforce the Order's rules on land agreements, and thereby protect competition between businesses and keep prices down for supermarket customers. This includes action on similar breaches of the same rules by Tesco in 2020 (23 breaches), Waitrose in 2022 (7 breaches) and Sainsbury's and Asda in 2023 (18 breaches and 14 breaches respectively).
Separately, the CMA is undertaking a wider piece of work looking at competition in the groceries sector and has set out the latest findings and next steps in its ongoing review, assessing competition across the supply chain with a focus on branded and own-label food suppliers. This follows an earlier update on retail competition in the sector.
