Walmart
Tasha heads to checkout at a Walmart Store in Chicago, November 23, 2012. Black Friday, the day following the Thanksgiving Day holiday, has traditionally been the busiest shopping day in the United States. Reuters/Stringer

Close on the heels of the exit of retail major Target from Canadian market, entrenched competitor Walmart’s Canada has upped the ante with a plethora of expansion plans. Accordingly, Walmart's Canada will open 29 new supercentre stores in the next 12 months. It will invest $340 million and create 3,700 construction jobs, 1,000 in-store jobs and 300 new positions in various distribution centres.

Leveraging Target's Exit

The CBC News report notes that the new expansion plan of Walmart’s closely follows its opening of 11 new supercentres across Canada in January. But analysts note that $340 million is very little compared to what the retailer had pledged to spend in 2014, where it announced a spending $500 million to open 35 new stores.

The new investment will mainly cover the remodelling and expansion of several stores and add grocery departments. The breakup of the spending plan of $340 million is like this,

· $230 million on new stores

· $75 million for distribution centres

· $35 million to beef up online offerings

Post-expansion, Walmart’s Canada store count will touch 396 of which 309 will be supercentres and 87 will be discount stores. The locations of specific store and distribution centre projects will be announced in the coming weeks. This must be good news for landlords who were let down by the sudden exit of Target Canada and were scrambling for new tenants

Prime Mover Advantage

On the question why Walmart’s is winning, where Target has failed, the analysts have some answers. They say the success of Walmart’s has less to do with its first-mover advantage. There was lot of struggle behind Walmart’s success, which made Canada one of the top five overseas markets of the retail major. Walmart's share in Canada’s retail market stood at 7 percent in 2014, which showed doubling of its share in a decade, from the 3.8 percent reported in 2004, according to a report by Market Watch.

Noting its high operational effciency, a Canadian analyst remarked, "Walmart's is world famous for its operational capability”. Robin Sherk, the Canadian analyst with the consultancy Kantar Retail praised the retail major for its efficiency. Like Target, Walmart's had to struggle initially and lost money in Canada. But it persisted and studied the market well and did not open its first supercenter until 2006. It showed remarkable patience and waited for 12 years to do that, after launching its first Canada discount store.

Walmart’s also hired Canadians to fill its local level senior positions. In contrast, Americans occupied many senior positions at Target Canada. Employees from local competitors like Canadian Tire and Loblaws, who better understood the cultural difference between anglophone Canada and francophone Quebec, were also recruited by Walmart’s, the report noted.

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