Daily BrewWilliams Sonoma announces Canada-U.S. price parity: Will other stores follow suit?
Even if you've never set foot in a Williams Sonoma store, you'll be interested in the U.S. home-furnishing retailer's plans to charge the same for most products sold in its Canadian stores as it does in its American outlets.
CBC News reports the company, which operates Williams Sonoma, Pottery Barn and West Elm stores, will reduce prices to parity or near-parity on all products except big-ticket items whose shipping costs from the U.S. remain high.
"We heard from our customers in Canada and this is what they want," said Rebecca Weil, spokeswoman for San Francisco-based Williams-Sonoma Inc., told CBC News. "All prices will be decreasing with some being on par to the U.S. and some just slightly higher."
Although it's weakened a little recently, the Canadian dollar has been largely equal to the American greenback for several years from lows in the 60-cent range in the 1990s. Parity has brought complaints from Canadian consumers upset about paying more in Canada for identical products sold in the United States.
The Senate explored the issue and its report last month concluded that factors including higher taxes, tariffs, labour and transportation costs, as well as a market one-tenth the size of its southern neighbour spread over a geographically large area were among the reasons for the price gap.
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The strong dollar also spurred a surge in cross-border shopping excursions as Canadians exploited their new-found buying power and a wider selection of goods in Uncle Sam's land.
But the interesting part of the Williams Sonoma announcement for me is whether other big foreign-owned retailers will follow suit.
Canada's relatively strong economy has made the country a very inviting prospect for many looking for a place to expand into a stable market.
Trendy department store Target will be opening more than 100 outlets in Canada this year in locations once occupied by the defunct Zellers discount chain. Target Canada hasn't committed to price parity but says "we absolutely intend to have competitively priced products in Canada."
Discount retailer Marshalls is expanding into Canada but not offering equal pricing. It cites a higher cost of doing business in Canada for steeper prices at its Canadian stores.
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Other big U.S. retailers looking north include Seattle-bsased Nordstrom, which is opening its first Canadian store in Calgary in the fall of 2014, followed by outlets in Vancouver, Ottawa and Toronto, CTV News reported last fall.
There's no indication yet of what it's Canadian pricing policy will be.
Hudson's Bay Co., which divested itself of Zellers, is also in talks with New York-based Bloomingdales to create a "store within a store" at its Bay locations, the Globe and Mail reported last May. Again, it's too early to forecast what Bloomies pricing policy might be.
It's safe to say that the newly arrived and established retailers will be looking for any edge they can get in what will become an increasingly competitive environment. They'll be watching Williams Sonoma's venture into price parity closely to see if it increases traffic in its stores.
