M&S sees Aldi as competition

Marks & Spencer has told the Competition Commission its stores are in competition with all types of grocery outlets - even discounters.

In its submission to the Commission's inquiry, M&S said it took all major multiples' ranges, standards, service and market shares into account when making strategy decisions.

"The way in which M&S responds to the activities of the main supermarkets (and, it should be noted, vice versa) demonstrates M&S is an effective competitor in mid-range shopping and can also act as a competitive constraint to one-stop shops."

Despite nurturing its image as a premium food retailer, M&S also said it believed it was in competition with discounters. It took issue with the Commission's assertion, in its Emerging Thinking document, that "upmarket grocery retailers, such as M&S, may be in a separate product market from limited assortment discounters such as Aldi".

M&S said: "Both Aldi and Lidl have started to introduce premium ranges. Competition on price has been, and always will be, a key element of competition between grocery retailers. There is therefore a degree of price competition between M&S and the likes of Aldi and Lidl."

How the Commission categorises store types is significant because, if the inquiry team opts to encourage more stores to be built, some retailers could be excluded from the ensuing bonanza if they are not considered effective competition to incumbent retailers.