TORONTO (Reuters) - Sears Canada said on Thursday it cut regular prices for more than 5,000 items, a first step in what it called a "transformation" to help it compete more effectively as Wal-Mart and Target prepare to expand across the country.
Along with lower prices, the department store chain will introduce new weekly sales, match merchandise in stores more closely with its flyers, and roll out new signs.
"In order to better compete in a complex and ever-changing retail industry, the company is committed to getting the value right for its customers," said Sears in a statement. "This will be the first significant change customers will see as a result of the transformation undertaken by the company."
Chief Executive Calvin McDonald, who joined the company in June, said that customers are "demanding great value."
Canadian retailers are facing increasing competition from Wal-Mart Stores Inc (WMT.N), which is expanding rapidly in the country, and in recent quarters Sears has reported declining sales. Target Corp (TGT.N) plans to open up to 135 stores in Canada, starting in the spring of 2013.
Sears Canada's parent Sears Holdings Corp (SHLD.O), which owns more than 90 percent of the company, has also been struggling to attract shoppers.
Sears Holdings has seen sales fall every year since hedge fund manager Edward Lampert formed it through the merger of Sears and Kmart in 2005.
Sears Holdings' problems were on display again in December when it said it would close 100 to 120 of its 3,500 U.S. stores after a dismal holiday shopping season.
Shares of Sears Canada fell 1.75 percent to C$11.79 on Thursday on the Toronto Stock Exchange.
Reporting By Allison Martell; Additional reporting by Dhanya Skariachan in New York