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

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.