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The Canadian Press - ONLINE EDITION

Walmart Canada to spend $750 million this year on new, remodelled stores

By: Sunny Freeman, The Canadian Press

Posted: 02/7/2012 6:14 AM | Comments: 0 (including replies) | Last Modified: 02/7/2012 11:57 AM

In this May 16, 2011 photo, the Walmart logo is displayed on a store in Springfield, Ill. Consumers spent less on big-ticket home items such as furniture and appliances in May as the housing market continued to slump, but categories such as clothing and luxury items fared better, according to data released Wednesday by MasterCard Inc.(AP Photo/Seth Perlman)

TORONTO - Walmart Canada plans to spend more than $750 million this year to open, relocate or remodel 73 retail stores, including former Zellers locations.

The world's biggest retailer said Tuesday the initiative will create more than 14,000 jobs — about 3,500 new store positions and 10,500 in the trades and construction sector.

The hiring spree would be a big help to Canada's job picture as the January unemployment rate rose to 7.6 per cent as the economy essentially stood still.

Walmart already employs about 85,000 Canadians and is the country's largest department store retailer by sales. It is part of the Walmart Stores Inc. (NYSE:WMT) retail giant based in Arkansas that operates around the world.

Included on the list of Walmart Canada stores are 39 Zellers locations the Canadian subsidiary bought last year.

"This year we are able to grow at a record rate in part because we were able to secure 39 leaseholds for former Zellers stores, most of which will open as Walmarts this year," said Walmart Canada spokeswoman Rosalyn Carneiro.

Walmart said more than half of the 73 projects will become supercentres, which offer an array of groceries as well as general merchandise. The retailer opened its first Canadian supercentres in Ontario in 2006, and has since ramped up expansion plans for the large-store concept.

"Introducing supercentres to more markets across Canada continues to be an important part of our strategy," Carneiro said.

"Canadians have responded very favourably to our supercentre concept. Our research tells us that our customers enjoy the one-stop shopping offer."

However, the company is not yet revealing which locations it has chosen.

The expansion comes as competition in the Canadian retail market heats up with the entry of fellow discount retailer Target next year.

The company plans to open 125 to 135 stores.

Target has purchased the leasehold interests of 189 sites currently operated by Zellers Inc. and it says about $10 million to $11 million will be invested to remodel each facility.

Walmart operates 333 stores in Canada, which includes 164 supercentres.

The U.S. retail king already spent $500 million to open 40 more Canadian supercentres last year.

Canada's grocery giants have complained about Walmart's entry into the supermarket space for adding pressure in a super-competitive environment, in which chains are forced to maintain low margins on top selling items to attract shoppers.

Walmart dedicates a team to making sure its prices are 10 per cent cheaper than the average in Canada. The retailer monitors flyers and prices at some 60 local competitors across the country, including those owned by Loblaw Co. (TSX:L), Metro Inc. (TSX:MRU.A), and Sobeys (TSX:EMP.A).

Grocery chains have increased promotions over the past year to attract cash-strapped consumers and as they face fierce competition, particularly in Ontario, from each other and retailers like Zellers and Shoppers Drug Mart (TSX:SC) who are increasing their food offerings.

Walmart will not only face competition from Canadian grocers and Target, but also from a number of other U.S. retailers who are eyeing expansion opportunities in Canada.

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