What is Price War in Retail? Explained

A price war in the retail industry occurs when competing businesses continuously lower their prices in an attempt to gain a competitive edge over each other. This competitive strategy often leads to a cycle of price reductions as each business tries to undercut the others. While price wars can benefit consumers by providing lower prices, they can negatively impact profit margins for businesses involved. Companies may engage in price wars to gain market share, attract customers, or respond to new entrants. However, successfully navigating a price war requires businesses to carefully consider the long-term implications on profitability and brand perception.