Wal-Mart Canada Corp. has pulled the trigger in what is shaping up as a holiday-season price war in video games, preparing to cut prices to U.S. levels on new releases and some current games.
It's just one reflection of the growing pressure from consumers to bring down retail prices on this side of the border, in line with the rising value of the Canadian dollar.
Shoppers have been annoyed about spreads on items such as books, video games and DVDs, either because U.S. and Canadian prices are displayed side by side on the product, or U.S. pricing is readily available online.
"It is confusing and I'm sure it's frustrating - some consumers are angry when they see some old books at very high prices," said Steve Budnarchuk, co-owner of Audreys Books in Edmonton and past president of the Canadian Booksellers Association.
"I think consumers are starting to make decisions to purchase less until the pricing improves. I'm seeing evidence of that. Or they're choosing books where the pricing is better."
Wal-Mart decided to pinpoint the video-game sector for U.S. parity pricing because it is such a high profile category, said Jim Thompson, senior vice-president of merchandise. It will price at parity "hundreds" of new releases, including Guitar Hero 3 leading into the busiest shopping season. Already it priced Halo 3 at $59.83 for an XBox console, about $10 less than at other Canadian retailers. Other merchants, including HMV Canada and Best Buy Canada, said they are also starting to get price breaks from suppliers and will pass on savings to consumers.
But achieving price parity in books or music isn't possible at the moment, although the company is lowering some prices, Mr. Thompson said. "We're not happy with our prices on our books now," he added.
Mr. Budnarchuk said publishers are reducing their prices, but not enough to allow for big changes on the store shelf. Older books can be as much as 50 per cent more expensive than their U.S. equivalents, while prices here are now about 25 per cent higher than the U.S. rates, he estimated.
Humphrey Kadaner, president of HMV Canada, said CD and DVD prices are generally not dropping because those products are made in Canada, so the dollar's value isn't a factor in the pricing.