Wal-Mart rounds prices to lure shoppers, differentiate itself in economic slowdown

The Canadian Press ~ The News
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TORONTO - Canadian shoppers are tightening their budgets and looking for easy ways to calculate what they'll be paying before reaching the register, and Wal-Mart Canada (NYSE:WMT) says that has inspired the company to remove decimal points from its top-selling items.
This week, a price round-off campaign will gradually start to change items sold at prices that go the cent - $1.99 and $2.43 and so on - at the country's biggest department store chain by revenue in favour of easier to understand price marks such as $1, $4, and $8.
''Right now, our sense is that it's a rare customer who doesn't come into our store with a budget,'' said Jeff Lobb, vice-president of marketing for Wal-Mart Canada.
More people are walking into Wal-Mart with ''a list that's going to guide their purchases, potentially even a calculator, and a competitive flyer,'' he said.
The company has responded by unveiling the new campaign which it hopes will simplify the process of tallying a shopping list before taxes.
That means a $1.88 tube of toothpaste falls to $1 and a $4.37 bottle of aspirin drops to $3. Consumers shopping at Wal-Mart's 312 Canadian outlets can assume that some prices will also rise.
''Our strategy is very much to default (price) down. This is not a round-up exercise in any way, shape, or form,'' Lobb said.
Wal-Mart is also reacting to concern about the economy which is radiating through the shopping experience. Retailers are searching for innovative ways to differentiate themselves from competitors and motivate consumers to spend.
Wendy Evans, head of retail consultancy Evans and Co. Consultants Inc., said the Wal-Mart campaign is a simple concept that has a good chance of connecting with the average consumer.
''For decades and decades retailers have always gone to the 95- or 99-cent endings as a psychological way of making the items seem less expensive,'' she said.
''This may just be a refreshing change to make it simple, and therefore distinguish them from the rest of the pack, particularly price-oriented retailers.''
Wal-Mart Canada is also expanding the number of its supercentres, which carry a wide array of food items and produce along with the company's usual offerings.
The retailer hopes to open 26 locations this year by either renovating current spots or opening new stores.

Organizations: Wal-Mart Canada, NYSE, Evans and Co.

Geographic location: TORONTO

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Recent comments

  • Barb
    January 18, 2010 - 11:18

    Sounds good, but what about the 13% tax at the til. I would be much happier if the tax was included in the price, then I would know what I was spending. (Like most countries)

  • lb
    January 18, 2010 - 11:07

    OUCH!!!!!! to the local small buisness ... the qweez is on