Sainsbury's and Asda told not to block rival stores

Sainsbury's and Asda have been told to stop using "unlawful" land agreements to prevent rivals from opening stores near their own shops.

The move may have reduced consumer choice of groceries and access to cheaper prices, the Competition and Markets Authority (CMA) said.

Asda and Sainsbury's played down the breaches, saying they had been "technical" and not harmed consumers.

The regulator previously reprimanded Tesco and Waitrose for similar actions.

The CMA's latest action comes as supermarkets are being investigated by the competition watchdog over high food and fuel prices.

According to the CMA, between 2011 and 2019 Sainsbury's and Asda had placed restrictions on land they own to stop it being used by rival supermarkets.

They also used legal agreements to block landlords from allowing competing stores on land in the same block as existing shops.

The regulator said Sainsbury's breached the Groceries Market Investigation (Controlled Land) Order 2010 18 times, while Asda did it 14 times.

David Stewart, executive director of markets and mergers at the CMA, 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."

Sainsbury's has agreed to remove the outstanding restrictions the CMA identified from its land agreements. The restrictions identified within Asda's land agreements have been removed.

A Sainsbury's spokesperson said the regulator had found "minor, unintentional technical breaches" that did not reduce competition in the grocery market .

It added that there had only been a "small number" of breaches, amounting to less than 1% of its relevant land agreements over more than a decade. "We have co-operated fully with the CMA throughout this process and we are now resolving these issues, as well as taking steps to make sure this does not happen again."

An Asda spokesman said: "We have reviewed details of over 1,600 property related transactions which identified 14 issues. All of these relate to legacy transactions that occurred between 2011 and 2019, when Asda was under different ownership, and involve technical errors in documentation that have all been resolved.

"We have also taken action to strengthen our CLO-related training and guidance."

The CMA took action against Tesco in 2020 for 23 breaches of the land rules, and and Waitrose in 2022 for seven breaches.

Grocery price inflation has soared in recent months, and some have questioned whether supermarkets are passing on falling wholesale food costs.

However, the grocers have denied profiteering, with the British Retail Consortium saying stores are working to keep prices "as low as possible".