Walmart to continue Canadian expansion over next year as Target enters market

TORONTO – Walmart will spend $450 million this year to open several new stores and expand its distribution network in Canada amid what is becoming an increasingly competitive retail landscape in this country.

The U.S.-based discount retailer says it plans on completing at least 37 additional supercentre projects by the end of next January, bringing the total number of Canadian locations to 388.

Nine of those locations will be new stores, with the remainder being conversions of existing properties into Walmart supercentres with a grocery offering.

Although the company refused to go into specifics, it says some of the locations slated to open will be in the Maritimes, where Walmart isn’t currently operating supercentres.

The expansion will also create 7,000 jobs — half of which will be retail positions. The company already employs about 94,000 people.

As part of its expansion plan, the company says it will also be adding 2,000 new private label products to shelves this year to offer customers more options and value to brand-name products. It will be also be selling the highly-anticipated BlackBerry 10 from Research in Motion (TSX:RIM), once it launches. Customers can currently pre-order the device in-store, but models and prices have yet to be released.

President and CEO Shelley Broader says the expansion move has little to do with its U.S. rival, Target, opening its doors here next month but added that the arrival will add to changes in Canada’s discount retail market.

“Any time there is something new that happens in the market, any time there is a new competitor, what it should do is make you sharper, make you stronger and make you more focused on your core strategy,” she said from the company’s head offices in Mississauga, Ont.

“We’re only becoming a better Walmart, a better low-cost operator, a better low-priced operator, a better one-stop shopping destination for our customers, based on exactly what they’re telling us.”

As more U.S. retailers continue to court Canadian dollars, Broader says the company remains confident that it can still provide customers with the best bang for their buck.

“The way that we look at the market isn’t really based on any specific competitor or series of competitors,” she said.

“The way we look at the market is completely focused on the voice of our customers. And we listen to them every single day. What we offer and our dedication to low prices is completely based on what we hear out of the mouths of our consumers.”

Walmart first came to Canada in the early 1990s, and since then has been expanding year after year to become the country’s largest department store retailer by sales.

Last year was one of the most aggressive for the discount chain, with planned spending of $750 million for the opening of 73 new Canadian stores — including 39 locations owned by former Canadian retailer Zellers.

But starting in March, rival Target will also be opening the first of between 125 and 135 locations also once owned by Zellers.

Target is spending about $10 million per store to upgrade and in some cases triple the existing square footage.

Although most retailers are quick to say they’re unfazed by the entrance of the U.S. retail giant, some, including Shoppers Drug Mart (TSX:SC), Hudson’s Bay Co. (TSX:HBC), Canadian Tire (TSX:CTC.A) and Loblaw (TSX:L), have scrambled in the past year to become more competitive. Steps have ranged from job cuts and management shakeups to capital raising and making renovations.

Walmart Canada has previously said it is confident it’s prepared for Target’s arrival. And it said it planned on lowering the prices of more items to about $1 as it also answers the expansion by Canadian dollar store operator Dollarama Inc. (TSX:DOL).