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Contestable Markets - Where now for UK grocers as Aldi overtakes Morrisons?

Graham Watson

18th September 2022

This Zoe Wood piece in the Guardian looks at how the cost of living crisis has changed the nature of grocery retail in the UK, with the rise of Aldi signalling the end of the 'big Four', with Aldi replacing Morrisons.

The latter shouldn't be surprising: both discounters, Aldi and Lidl, have aggressively pursued growth and continue to open new stores, whereas Morrisons aren't doing this. Furthermore, the concept of income elasticity of demand (YED) would imply that the discounters have further gains to make and those supermarkets at the top end of the market further to fall.

And perhaps consumer tastes are changing? Given the rise of online retail, do shoppers really see their shopping trips in the same light as they did 20 years ago? Or have they become more functional - with people perhaps getting their basics from supermarkets, with an eye on price, and then looking to get other purchases, such as meat and fish, from independent retailers?

Graham Watson

Graham Watson has taught Economics for over twenty years. He contributes to tutor2u, reads voraciously and is interested in all aspects of Teaching and Learning.

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