Wal-Mart Canada Gears Up for Competition from Target

February 10th, 2012 by Trefis Team
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Wal-Mart (NYSE:WMT) is leaving no stone unturned as it competes with rival Target (NYSE:TGT), which is also vying for a presence in Canada starting in 2013. Target plans to open 24 stores in Ontario in March or early April in 2013. It has allocated a budget of approximately $2.3 billion to convert Zellers stores and integrate them into its retail network in Canada. In order to strengthen its position in Canada, Wal-Mart has allocated $750 million for a makeover of its existing stores. Wal-Mart competes with other big retailers like Target (NYSE:TGT), Costco (NASDAQ:COST) and Best Buy (NYSE:BBY).

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Wal-Mart Canada Braces Up for Competition

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According to David Cheesewright, CEO & President, New Wal-Mart Regional Management, Wal-Mart Canada is an important contributor to Wal-Mart’s international portfolio. It has consistently outperformed the overall market in terms of growth by 2% annually. [1] Wal-Mart’s International division is a significant contributor to Wal-Mart’s overall valuation, with approximately 35% share, according to our estimates.

Here are some of the makeover initiatives:

  • Wal-Mart Canada plans to complete at least 73 projects this year including building new stores and expanding, remodeling and relocating existing stores.
  • In June 2011, Wal-Mart Canada purchased 39 Zellers stores that are also scheduled to reopen as Wal-Mart stores this year, taking the total store count to over 375 by the end of 2012.
  • It plans to add 4.6 million square feet of retail space to its operations this year.

Wal-Mart has had a presence in Canada since 1994 and presently has 333 stores, including 164 super centers. We are optimistic about Wal-Mart’s efforts to remodel and expand its retail space in Canada in light of the upcoming competition with Target and other prospective retailers. Strengthening its retail presence and solidifying its logistics and supply networks will prepare Wal-Mart to come out stronger amid competition in the coming years.

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Notes:
  1. See: Walmart to expand Canadian footprint, The City Wire [↩]