Monday, December 3, 2007

Canadian Retailers, Manufacturers Continue to Drop Prices

By now, you're probably tired of reading story after story about the Canadian/U.S. dollar, but after weeding through my inbox this morning, I couldn't help but report on the topic.

Retailers like Sears, Wal-Mart, and Future Shop, have all made announcements that they have reduced prices in wake of the Canadian dollar. Wal-Mart is running radio commercials that discuss the rising Canadian dollar and the subsequent reduced store prices. Sears Canada even has a name for its marketing strategy: Stronger Dollar - Lower Prices.

I've done some comparisons myself, and I can attest to the fact that it isn't all B-S: some of the prices have indeed been cut such that they are in line with what the same product is selling for in the U.S. However, I can understand how consumers could be skeptical, judging each move as a mere marketing ploy.

My advice: do your research. With the existence of the Internet, it's pretty darned easy to see if a product is in fact being offered at the same value in Canada then it is in the U.S. Also, even if the price is a bit higher in Canada, don't automatically assume that you're getting hosed. Read the fine print to find out if there are added incentives to the purchase. Is there a longer warranty? Olympus Canada, for instance, just announced that it would be adding an extended warranty to the purchase of any of its digital SLRs (and lenses) in Canada at no additional charge. In fact, this announcement was made in conjunction with the company's announcement that it would be dropping Canadian prices! Another question to ask: are there favourable delivery options that would make purchasing in Canada a better deal? Sears Canada just announced that it would be offering free shipping on soft goods to any location in Canada. The bottom line: dig deeper before making a rash judgment call.

Meanwhile, retailers aren't the only ones taking steps to slash prices. When it comes to discrepancies in pricing between Canada and the U.S., digital cameras are one category of product that often experiences an unusually wide gap. Two manufacturers, Nikon and Olympus, have already made announcements that they would drop prices in Canada. Although Nikon said it could not offer price parity, the company said that the lower prices would still be "competitive". (Keep in mind, however, that, when it comes to the manufacturers, they are reducing their own suggested retail pricing: the actual sale price you'd see in the store is ultimately up to the retailers).

As for the Canadian dollar, it remains relatively on par with the U.S.: at last check, it was worth $0.99 U.S.

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