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Retailers blame multinational suppliers for Canada-U.S. price gap - What do you think

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  • Apr 25th, 2012 9:32 pm
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Retailers blame multinational suppliers for Canada-U.S. price gap - What do you think

A 20% differential may be reasonable (there's an 18% custom duties / tariffs that would have been charged when Canadians return from cross-border shopping anyway so this equalizes pricing) but a difference of 50% or more seems inexplicable. Why can Apple sell products with less than 10% price differential? Is it because it chooses to make a little less profit here?
Maybe one reviewer is right in that there are too many middle-men (with fat margins) brokering many of the goods sold here.

Seems like Canadian consumers are not buying this though:

http://www.theglobeandmail.com/report-o ... /comments/
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The middleman argument is part of the reason; every time someone touches a product, they make a bit of money. With Apple there are only two hands; there is Apple themselves and the retailer so therefore less added costs.
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Any excuse will do at this point is what I think. They are running out of options and targets (lol, no pun intended) to point fingers at. This is not 1995 anymore when the internet was just starting to get a foothold. Consumers are wising up and many more are shopping south of the border, and they are spreading their savings news like wildfire across forums such as this. It is obscene how much price gouging is happening in EVERY SINGLE area of consumer goods in Canada. The retailers and providers can continue to come up with excuse after excuse and then go whine to their paid off politicians, to get more regulation and fees imposed so they can continue to line their pockets at an astounding rate. Why not? Canadians are mostly passive sheep. They (Canadians) will continue to take it up the rear and then go on bragging how great it is to get what we get in return for living here. (btw, not knocking it. This country is great.Just making a statement) Meanwhile the general populace continues to give $ to greedy Canadian retailers and providers, whilst the retail bosses and the politicians they pay off, spat in our face and run off with their wheelbarrows full of cash laughing at us the whole time. Lather, rinse, and repeat. If anyone thinks that Target entering the Canadian marketplace will make an iota of a difference, you need to wake up. Target will get a sense and a taste of how much $ they can gouge us, and will do so in a split heartbeat. Then the frustrating cycle repeats.
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alanbrenton wrote: Thank you. Seriously, is there anything else cheaper here in Canada besides nominal wages to comparable jobs in the US?

There are things cheaper in Canada.

- Drugs
- Health Care (not even talking about medicare, talking about actual dollar cost of an outpatient surgery. Also Dental and optical are far cheaper)
- Wheat based foods
- Sugar and sweets

Also nowadays items like electronics and durable goods are pretty much identical on both sides of the border. Compare Best Buy to Best Buy regular prices and you are not going to find much difference. Yes, sales can be different and giants like Amazon which we do not have skews things - but on the whole, the prices are the same.

Personally my point of view is people who think there is still a large price dispartiy between the US and Canada are simply living with blinders on. I shop in the US *ALL THE TIME*, spending many thousands / year. I know my prices, and I know what is cheaper there overall, and what is simply cheaper due to large retailer influence.
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Cost of doing business is often higher up here. You need to pay everyone along the supply chain higher wages due to an artificially high minimum wage, you have to deal with unions that can hold companies hostage without giving the corporation any recourse, and in many cases pay higher taxes to operate, we have mandated supply management when it comes to some foods which increases cost, and stronger government regulations (increased red tape) which also increases cost, you can't use the same packaging you use in the US because you need French, which adds cost. Then frankly we just don't have the volume that the Americans do.

That being said, some positive steps have been taken to help fix this in recent years, corporate tax cuts in many provinces and at the federal level, transition to the HST in Ontario and BC (although BC is reversing this), and the cost gap has narrowed, but it's not completely the same.

I'm frankly not convinced that the whole "companies gouging us" line is true. There are many fixed costs of operating a business in this country that are more expensive than in the United States for a foreign company.
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CorSter wrote: Cost of doing business is often higher up here. You need to pay everyone along the supply chain higher wages due to an artificially high minimum wage, you have to deal with unions that can hold companies hostage without giving the corporation any recourse, and in many cases pay higher taxes to operate, we have mandated supply management when it comes to some foods which increases cost, and stronger government regulations (increased red tape) which also increases cost, you can't use the same packaging you use in the US because you need French, which adds cost. Then frankly we just don't have the volume that the Americans do.

That being said, some positive steps have been taken to help fix this in recent years, corporate tax cuts in many provinces and at the federal level, transition to the HST in Ontario and BC (although BC is reversing this), and the cost gap has narrowed, but it's not completely the same.

I'm frankly not convinced that the whole "companies gouging us" line is true. There are many fixed costs of operating a business in this country that are more expensive than in the United States for a foreign company.

There is truth to what you say but maybe many Canadian companies are operating on a cost plus basis, without needing to sacrifice any margins (ala circa 90's when e-commerce wasn't as wide spread)? Yes the current US unemployment paints a worst picture but it's probably not a good enough reason to charge the Canadian market what it can bear. Seems some of the winners here are courier and brokerage companies because of the increased amount of individual shipments and rise of p2p buying/selling.

I feel for some of the Canadian industries that are hurting (as it hurts Canadian workers too) but for trading (buy/sell) companies which don't have a lot of overhead, they will have to price their goods more competitively.
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CorSter wrote: I'm frankly not convinced that the whole "companies gouging us" line is true.
+1 its just another 'retailers are trying to rip us off' mentality.

Same goes with honest SCOP mistakes, people think stores are trying to make profit from overpricing things but you'd be surprised how big of a percent of buyers notice and dispute the prices.

Those are the 2 topics that entertain me in the shopping discussion forum.
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Eliminating duties or matching them to US rates would help a lot with leveling the retail playing field. The remaining 10 or so percent difference could be explained by higher labour/transport/economies-of-scale costs, I guess. We have a higher fuel taxes IIRC.

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