Price Wars – The only war when all consumers win

Hurray!  Price Wars are here to stay!  Well, at least for a while… Price-War2

You’ll be happy to know that food and general merchandise products will continue to experience retail deflation in North America (and especially in Ontario, Canada).

That’s good news if you are a consumer.  It is bad bad bad news for a retailer and even tougher for ‘mom and pop’ shops.

But overall, Price Wars are positive for everyone and are a result of increased retail competition.  Competition drives deflation (a decrease in the retail price) and in an economy where so many commodities and products are going up up up in $, it is nice to see the things we want and need are actually going down.   price-war

Major U.S. companies are heading North – the Canadian frontier – an untapped market.  For example, in Canada the implication of the USA-owned Target entering the retail stage has every retailer holding their breath.  This is the quiet, just before the storm.  With major retailers like Walmart, Loblaw, Sears,  Metro,The Bay, Sobeys, etc etc – the market is already supersaturated with supermarkets!

Most analysts believed that after Walmart’s entry, the retail industry was at capacity.   They were wrong. While profits have eroded, all major retailers still stand.  So far.  However, if and when interest rates start to rise, our consumer debt will drive a tighter money belt.

Right now our consumer asset to debt ratio is 150% (for every $100 we make, we owe $150!).  So we’ll see a crack in the mighty brick and mortars soon (interest rates can only rise from here).  Hang on tight, the ride will be a wild one.

Save your money and take advantage of the savings coming soon…

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About David J. Bartolini, H.B.Sc, MBA

David Bartolini is an Entrepreneur (Consultant), Author and Part-time Professor at Humber College and Instructor at University of Toronto. He is Principal at BARTOLINI CONSULTING. Bartolini Consulting focuses on Retail Merchandising and Branding opportunities for Consumer Packaged Goods’ companies - both manufacturers/growers as well as Retailers (www.bartolinibrands.com). David Bartolini is a former executive with over 10 years' experience in retail. He has worked for two iconic Canadian retailers (Loblaw and Sears) and is recognized as a leader in driving innovation in both brand/product development and merchandising processes. David's passion for Retail & Food continues outside the corporate arena to academia. Since 2008 he has helped teach hundreds of students through a course: Fundamentals of Retail Merchandising and Brand Management at the University of Toronto and Humber College. He also currently teaches Personal Branding at Mohawk College in Hamilton. David is also author of Insecta, a trilogy written for all ages, mainly focusing on Young Adults. www.insecta.ca
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