Skip to main content

A Sears Canada outlet is seen in this file photo.

Ryan Remiorz/THE CANADIAN PRESS

Sears Canada Inc. is moving to match rivals' lowest appliance and mattress prices – changing prices in its stores daily – in a reflection of the significant impact of Internet comparative shopping on traditional retailers.

Brandon Stranzl, executive chairman of Sears, said in an interview that the department store retailer, which released weak first-quarter results on Wednesday, started a couple of weeks ago to match appliance prices with the lowest rates in the market every morning.

The initiative will soon be applied to mattress prices as well, he said.

Story continues below advertisement

"You will see fairly substantial changes in how we go to market in appliances and mattresses," he said. "We want to establish price trust with consumers."

Mr. Stranzl, who took the top job at Sears almost a year ago, is racing to turn around the troubled retailer, launching changes in various departments and setting up a digital lab while slashing costs and selling off real estate and other assets.

The initiatives have yet to show up in the company's overall results. He said it will take until next spring to see a "noticeable" impact on the financials.

In its first quarter, Sears' loss grew to $63.6-million or 62 cents a share from a loss of $59.1-million or 58 cents a year earlier. Overall revenue dropped to $595.9-million from $697.2-million.

Same-store sales at its "core" locations (95 department stores and 39 home stores) fell 6.9 per cent and overall same-store sales were down 7.4 per cent.

The Toronto-based retailer said the sales decline was the result of an array of factors, including a drop in sales of big-ticket items such as major appliances following the termination of a credit card agreement.

The company also said it is raising its cost-cutting target in a bid to return to profitability. It's aiming to lower its annual costs by between $127-million and $155-million. The previous range had been between $100-million and $127-million, in which $80-million was achieved in the first quarter.

Story continues below advertisement

It said "a moderate amount of the savings" will be reinvested in growth initiatives.

By the fall, Sears will launch two pilot prototype stores with some of its new concepts, such as apparel shops geared at younger consumers and an expanded cosmetics section.

Sears' price matching in appliances and mattresses is a way for the retailer to do the price comparison work for the customers, Mr. Stranzl said.

"They don't have to do the work," added Becky Penrice, chief operating officer at Sears.

The practice of retailers matching prices is becoming increasingly common, although consumers often have to show a rival merchant's advertisement or flyer to prove a lower price elsewhere.

Mr. Stranzl said Sears will cut the price another 10 per cent if a customer finds a lower price at a rival.

Story continues below advertisement

Ms. Penrice said Sears uses a third-party online "price scraping" tool to identify daily market pricing. It sends its stores a report for matching the lowest price compared with major competitors nationally.

She said the mattress category is different from major appliances because mattress brands and models are inconsistent among retailers. Thus in mattresses, "we focus on comparable features of major competitors to establish the market price at a national level," she said.

"While we do change prices on major appliances daily, the mattress category prices fluctuate less frequently, but we will check with the same frequency as we do with appliances," she said.

Sears' overall goal is to more than double its sales per square foot, which is roughly $200 today, he said.

Sears also announced plans to sell and lease back its logistics centre in Port Coquitlam, B.C., later this year.

Report an error Editorial code of conduct
Tickers mentioned in this story
Unchecking box will stop auto data updates
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies