Walmart Canada bets big on supercenters

Wed Jan 26, 2011 10:31am EST
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By Arnika Thakur

BANGALORE (Reuters) - Walmart Canada, a unit of the world's biggest retailer Wal-Mart Stores, plans to open 40 more supercenters in the country that has been seeing stronger retail sales growth than its southern neighbor.

The third-largest employer in Canada with 85,000 associates expects the new supercenters to generate more than 9,200 store and construction jobs.

Walmart Canada, which plans to invest more than $500 million in the project, already has its centers in Ontario, Alberta, British Columbia and Saskatchewan. It is bringing the supercenters to two more provinces, Manitoba and Quebec.

Since mid-2006, Canadian retail sales have grown 3 to 4 percentage points faster than the U.S. market, prompting more and more U.S. chains to expand their business across the border, according to a recent Reuters report.

Brand awareness, similar shopping habits and higher profit margins in the Canadian retail sector are also factors for U.S. retailers looking to begin expansion, a report by Moody's Investor Services said late last year.

Also, demand for retail property in Canada has been growing, aided by a strong domestic economy and relatively modest retail rental rates.

Walmart, which offers groceries and general merchandise under one roof, launched its supercenter format in Ontario in 2006, twelve years after entering the country.

Earlier this month, Target Corp, the No. 2 U.S. discount retailer, made its first international foray, taking over Canadian leases for Zellers stores owned by Hudson's Bay Co, North America's oldest company.   Continued...