Price Sensitivity Analysis in Canadian Consumer Markets

Abstract

Price sensitivity reflects the degree to which consumer demand responds to changes in product prices and is a fundamental determinant of firm pricing strategy, revenue optimization, and market competitiveness. In Canadian consumer markets, price sensitivity is shaped by rising household costs, regional economic variations, strong retail competition, and increasing digital price transparency. This study examines the conceptual foundations, drivers, and sectoral variations of price sensitivity in Canada through an integrative literature-based and market-structure-focused analysis. The paper synthesizes economic, psychological, and behavioral dimensions of price sensitivity and proposes a conceptual framework linking macroeconomic pressures, market structure, and consumer traits to purchasing responsiveness. Key product categories such as grocery, apparel, fuel, electronics, and subscription services are examined to highlight differential elasticity patterns. The findings indicate that Canadian consumers exhibit high price sensitivity in essential and digitally comparable categories while showing relatively lower sensitivity in premium, localized, and value-augmented segments. The study concludes with strategic implications for retailers and manufacturers, ethical considerations, and future research directions.