Sobeys Quebec has decided to “permanently” drop the price of more than 8,500 grocery products by an average of 5 to 7% starting this week.
The move applies to centre of the store items and affects all IGA and IGA Extra stores in Quebec, IGAs operated by Sobeys Quebec in New Brunswick and the Rachelle-Béry and Les Marchés Tradition banners. Produce, bakery, fish and meat sections are not affected by the initiative.
“We’re reviewing the entire business process and we’re negotiating price drops directly with suppliers,” says Marie-Noëlle Cano, director of communications and sustainability at Sobeys Quebec. “Whatever price drop that they’re able to get, we’re transferring that directly to customers.”
Savings from the elimination of IGA’s long time weekly promotion, in which an average of 450,000 customers who made purchases of more than $70 received a free product, are also going into the new program.
Clients appreciated that promotion “but at the end they weren’t really perceiving the added value of the products,” she says.
Cano denies the change is in response to competition from Walmart. “We want to make sure we’re keeping our customers in our stores and that they’re able to find what they want at the price that they want.”
She says the price drop is linked to surveys conducted after the launch of IGA’s Joy of Eating Better movement that concluded customers felt it was complicated and more expensive to eat better.
Asked whether the move could set off a price war in Quebec, Cano says the target was customer satisfaction and to be as competitive as possible. “As to what our competitors’ reactions are going to be, I really have no idea.”
Under the permanent price drop program, prices will be frozen for at least three months. Price increases “would have to be for something extremely important,” that would be industry-wide.
Flyer promotions will continue, but the competitive pricing initiative means customers “don’t necessarily have to wait for the flyer promotions every week.”
The price-drop initiative differs from the one Sobeys announced earlier this year for its Safeway stores in Western Canada, Cano says.
IGA says its emphasis on product quality and variety will not change.
By Thursday, all stores will have shelf labels showing the prices before and after the price drop.
Among the price drops: Hunt’s tomato sauce drops from 89 cents to 75 cents, Nestlé Parlour Ice Cream (1.5 l) drops from $5.99 to $4.99, Cracker Barrel Cheese (250 g) drops 19% from $6.79 to $5.49 and Compliments Apple Snack Cups drops 26% from $2.29 to $1.69.
This article originally appeared at CanadianGrocer.com.
