Walmart cuts prices on staples in Western Canada

Fri Mar 12, 2010 9:38am EST
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TORONTO (Reuters) - Walmart Canada said on Friday that it plans to cut prices on staple goods in Western Canada as it ramps up a price war in that hotly contested area.

The company, a subsidiary of U.S.-based Wal-Mart Stores Inc (WMT.N: Quote) (WMT.N: Quote), said the items include everything from milk and bread to eggs and butter.

The move comes as competitors such as Loblaw Cos Ltd (L.TO: Quote), the country's biggest grocer, and Sobey's, a division of Empire Co Ltd (EMPa.TO: Quote), continue to expand in that area.

Loblaw has opened a number of its discount No-Frills stores over the past few years, which offer low prices on all their goods.

Walmart, which has 317 stores across the country, has also opened a number of its larger-format supercenters in western Canada, which offer groceries and general merchandise under one roof.

"This is probably a reaction to the increased discount competition that they (Walmart) are facing," Bill Chisholm, a retail analyst at MacDougall, MacDougall and MacTier, in Toronto, said of Walmart's latest move.

Last month, Walmart also said it planned to spend C$115 million ($113.1 million) to open a refrigerated distribution center in Alberta later this year, which would serve a large part of Western Canada.

($1=$1.02 Canadian)

(Reporting by Scott Anderson, editing by Gerald E. McCormick)