What strategies can rescue retailers from price wars?

PwC’s Chik Aun Foo warns that competing on cost alone leaves companies in a 'bloody fight.'

PwC Strategy Consulting for Retail and Consumer partner Chik Aun Foo told the Retail Asia Summit in Singapore that the traditional retail model of competing on “more, faster, better, and cheaper” is unsustainable, warning that in markets such as China it has led to a “very tough, bloody fight.”

He argued for a shift towards brand-led retail, where companies act more like fast-moving consumer goods (FMCG) brands by segmenting consumers, curating assortments, and building differentiated experiences.

Foo cited Sam’s Club in China, which he described as a US$5b business that grew 17% last year. Around 47% of its sales and 60% of its profits come from online channels. Its success, he said, rests on exclusive products and offerings tailored to middle-class consumers.

He also highlighted Pang Dong Lai, a Henan-based supermarket chain with 13 stores, which has built its reputation on strict category management and consumer focus, only stocking products that fit its brand standards.

Snack retailers provided further evidence of brand-led success. Ling Su Xiaotian drew customers with extensive choice and digital integration, whilst Lifen developed private-label products marketed directly to loyal consumers, creating what Foo called a “cult following.”

He framed the sector’s evolution as a continuum: from channel, to shopper, to consumer. Retailers are moving towards consumer orientation, while consumer packaged goods companies are building channel management skills. Partnerships such as Moutai with Luckin Coffee illustrate how brand-led collaborations can generate fresh demand.

Foo said that retailers and brands must align on consumer-driven strategies to escape the margin pressures of price-led competition.