BEIJING, Dec 20 Reuters A shift in Chinese retailers39; strategy toward lowerpriced goods and services to win costconscious consumers risks embedding the country39;s recent deflationary trends more permanently into the world39;s secondlargest economy.

Price cuts, the proliferation of bargain stores and companies offering cheaper, scaleddown versions of their products may create a vicious cycle of lower profit margins that curtail wage and job growth and further depress consumer appetite. This stands to create more headwinds for China39;s stuttering postCOVID recovery.

The fierce competition to draw the attention of thrifty Chinese consumers is reshaping the country39;s retail landscape and the deflation concerns are drawing further comparisons with Japan39;s lost decades of stagnation.

Falling income growth is normalizing lower consumption in China, with some industries experiencing declining revenue, as companies are lowering prices to maintain their market share and avoid being squeezed out, said Wang Dan, a Shanghaibased economist at Hang Seng Bank.

It is definitely a price decrease or low inflation environment now. Though it is hard to forecast how long the situation will last, but for sure it is bad for the economy, she said.

Numerous examples of Chinese retailers offering lowerpriced alternatives have appeared in response to consumer39;s costcutting.

Haidilao, China39;s largest hotpot restaurant chain known for premium, attentive service, in late September…