In a surprising move, a few days ago Walmart Canda announced that it will no longer accept VISA credit carda in its Canadian stores. According to Walmart’s website, this move will help the company save more than $100 million per year, savings they could use istead to help them keep their low everyday prices. (Walmart Canada to stop accepting Visa cards due to ‘unacceptably high’ fees
For many years, and especially throughout the recent retail apocalypse, many thought that the Walmart chain will be the last one standing. This year, we started to see this change. In January 2016, Walmart announced that it will close 269 stores worldwide, more than half of them – in the US. No Canadian Walmart stores were closed, but this new move shows that Walmart Canada might be under pressure. Pressure to keep prices low, trying to cut corners and save money, wherever they can. Trying to cut corners in order to keep prices low.
Another Canadian chain did something similar, though not quite the same. In the spirit of saving money in order to keep prices low, in April of this year, IGA (owned by Sobey’s) announced that they will no longer offer free products with a purchase of $70 or more. Instead of giving free products to an average of 450,000 customers per week, they would lower prices in the province of Quebec in an attempt to attract more customers. (Sobeys Quebec drops prices on over 8,500 products). A few weeks after this new business plan was implemented, customers started complaining that either prices were not lower than before, or only a few products per week actually cost less than usual. In addition, IGA increased the prices of a couple thousand products! (La Presse, IGA a aussi augmenté le prix de 2000 produits) In the end, it all seemed like a marketing strategy, intended to mislead customers and make them believe all these changes were made for their benefit, when, in fact, they were a cost-cutting mesure.
It seems that all those trying to survive the retail apocalypse that we have been witnessing during the last two years, are constantly looking for ways to decrease their expenses, making sure they can stay competitive in an environment of increasing inflation. It is one more of the stages of inflation that I write about, confirming the continuing trend we can all see happening around us.