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Price gap opens between Canada and US

News, 17 December 2014

TORONTO: Consumers in Canada are paying significantly more than their American counterparts for tablets and other high-demand electronic devices, new cross-border analysis has established.

According to GfK, the market research firm, a comparison of advertised prices for electronic goods in the first 11 days of December 2014 showed Canadian shoppers paid a premium for most electronic goods during the holiday season.

Furthermore, this trend has been consistent throughout the year while the only key category that registered cheaper prices than in the US was for printers and multifunction devices.

GfK's comprehensive list of Canada versus USA price comparisons showed all (100%) tablets on sale over the period had better prices in the US, delivering an average 20.5% saving for American consumers.

Similarly, 88% of TVs were cheaper in the US, averaging 27.7% savings, as were four-fifths (80%) of wearable technology and home theatre systems, averaging savings of 13.4% and 7.6% respectively.

Just over half (55%) of digital cameras had better prices in the US, although only 18% of printers and multifunction devices were cheaper in the US than in Canada.

Coming just a week after the Canadian government announced a Price Transparency Act aimed at narrowing the price gap between goods sold in the two countries, GfK said Canadians have been paying more on a consistent basis.

"These cross-border pricing discrepancies are consistent with trends we have seen throughout 2014," said James Kennedy, country manager Canada at GfK.

"Canadian consumers continue to pay more than US consumers on high-demand electronic goods, whether it is holiday season or the middle of summer," he added.

For example, the premium Canadians pay for TVs has nearly doubled since 2011, rising from 13.2% to 24.4% in 2014, although the premium for digital cameras has dropped from the 10.4% they paid three years ago.

Under the new legislation, Canada's Commissioner of Competition will be empowered to investigate alleged cases of price discrimination and will be able to force retailers to disclose details about how they decided on their pricing structures.

They may be required to provide evidence to show that their price differences are justified and the findings can be reported back to the public.

Data sourced from GfK, CTV; additional content by Warc staff