Mannings, the SAR's biggest drug-store chain, has set its sights on winning business from Hong Kong's 1,700 small pharmacies.
Chief executive Caroline Mak Sui-king said Mannings had cut its prices an average 2.9 per cent in the first five months of this year as it sought to compete with small drug-store operators.
Overall consumer prices fell 2.8 per cent in the same period.
Ms Mak said Mannings had established a fast-response mechanism to keep its prices competitive in the face of flexible pricing strategies applied by small players.
'In a small pharmacy, you may find many goods without a price tag leaving room for you to negotiate the price,' Ms Mak said.
Small pharmacies also typically used a 'loss leader' strategy - pricing some goods very cheaply to attract consumers.
