In the News

Contestable Oligopoly - Sainsbury’s takes on Aldi in supermarket price war

Graham Watson

10th February 2021

Here is a fascinating change in tenor in the grocery retail sector with established brands Tesco and Sainsbury's both looking to take on the discounters with a price-match scheme focused on targeting Aldi.

This suggests that the sector has entered a period where there's likely to be price competition, and not stable prices as traditional models of oligopoly would suggest.

However, even more surprisingly, I think is the fact that it seems to mark an end to the notion of discrete market segments - such as discounters, the mid-range supermarkets - such as Tesco and Sainsbury's - and high-end retailers like Waitrose and M&S Foods.

So, it's not as simple as it might first appear - and it will be interesting to see how the established chains get on - the last such venture, the launching of Tesco's Jacks brand proved singularly unsuccessful.

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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