[a href="vny!://www.reportonbusiness.com/servlet/story/RTGAM.20071019.wpricecut1019/BNStory/robNews/home"]Zellers cutting prices because of high dollar[/a]
Hudson's Bay Co. says it is set to pass on some of the benefits of the Canadian dollar's strength by cutting prices by anywhere from 5 per cent to 25 per cent on a number of everyday household items at Zellers stores across the country.[/p] The cuts, which are to take effect starting Friday at all Zellers's 298 stores, follow negotiations with the company's suppliers and will cover products such as Pampers diapers, Windex and Glad garbage bags, HBC spokeswoman Hillary Marshall said.[/p] The early Friday announcement from the iconic Canadian retailer — now, ironically, U.S.-owned — comes a day after Bank of Canada Governor David Dodge urged consumers to demand better deals from retailers, which, so far, have mostly declined to cut prices in the wake of the loonie's surge to parity and beyond with the U.S. dollar.[/p] It also comes a day after another U.S.-owned retailer, Wal-Mart Canada Corp., said it will chop Canadian prices for video games to U.S. levels, pricing "hundreds" of new releases at parity, as the Christmas shopping season rapidly approaches.[/p]The campaign is currently confined to Zellers, but Ms. Marshall said there is nothing to stop the company from extending it to its four other retail divisions, the Bay, Home Outfitters, Fields and Designer Depot, which, in all, boast 282 outlets. It also plans to extend the range of products covered as it is able to reach new deals with suppliers.
A key reason retailers in Canada have been slow to lower prices is that the high loonie fattens their profit margins. But the pressure is growing, and Zellers's move will ratchet it up still further, economists say. commentators say.[/p] "This should force the hand of competitors to trim prices as well," Laurentian Bank Securities economist Sébastian Lavoie said in a note to clients Friday, commenting on the retailer's announcement.[/p]
