Loblaw is on a price-cutting spree to try to win back customers. Will more Canadian companies follow suit?

financialpost.com:

As Canadian consumers pull back on spending after years of rising costs, some retailers are cutting prices to lure people back into their stores.

Loblaw Cos. Ltd. recently announced a plan to lower prices on some of its merchandise in Shoppers Drug Marts after front store sales declined, driven in part by lower customer spend on such convenience items as food and household goods.

“There is some pressure to keep consumers returning to the ‘store,’ even if its margin reduced,” said retail market strategist David Ian Gray.

One stock analyst covering several Canadian retailers said they expect other grocers to follow suit, if they have not already done so, should the planned pricing action by Loblaw lead to share gains — although those companies may not publicize it as Loblaw did.

Food prices are mostly competitive, and all grocers are priced closely within their competitive set week after week, according to their analysis of stores such as No Frills, Walmart, Food Basics or Loblaw, Metro, Sobeys, explained the analyst, who asked not to be named. This means if prices for certain items at one grocer does go down, other retailers will likely match it to remain competitive.

A significant number of public companies both sides of the border have revised their revenue guidance downward for the balance of the year, said Gray, adding that the retail industry “is super anxious,” not just about the rest of 2024 but 2025 and beyond.

Canadian Tire Corp. Ltd., which released its third quarter earnings on Nov. 7, highlighted a continued constraint in consumer spending, especially discretionary, in its earnings results. The company has experienced a decline in spending across every segment over the past five quarters, chief executive Greg