At the Goldman Sachs Global Retailing Conference, Wal-Mart Stores Inc. discussed its plan to strengthen its position in Canada. The move comes as Target Corp., a key competitor, ramps up its presence north of the border after entering Canada in 2013.
“The best thing about their entry was the notice that everybody got about them coming,” said Dave Cheesewright, president and CEO of Wal-Mart International. “It has accelerated the performance particularly of assortment management of the Canadian business because we knew someone else was coming into our marketplace.”
One of the tactics that Wal-Mart implemented was through the growth of food for the business, the “second-biggest trend in Canada,” said Cheesewright. Wal-Mart has opened more than 260 food stores over the last five years, and they are not finished just yet.
“We’ve taken the vast majority of food growth in that market over the last five years and we have still got a few more years to keep focusing on that,” he said.
Wal-Mart has been able to expand its Canadian food business by putting grocery sections inside existing stores rather than physically expanding.
“Quite a lot more stores where we’ll put food inside the existing box rather than to go through the cost of expanding,” Cheesewright said.
The opening of food stores by both Wal-Mart and Target has had an impact in the market. Adding about 370 new stores (about 260 Wal-Mart, 120 Target) into a market where there is “a lot of food competition into the area anyway” has that effect where some of the smallest retailers are squeezed out because it gets close to the point of saturation. Cheesewright sees this as a good thing and just an opportunity for “everybody else to be better.”
