Wal-Mart Stores Inc. (WMT:US) plans to step up the pace of store and online expansion in Canada as the battle for shoppers’ wallets intensifies.
Wal-Mart Canada will invest close to C$500 million ($450 million) in 35 new supercenters, an improved distribution network and e-commerce projects, as it takes on grocers such as Loblaw Cos. (L) and as Target Corp. (TGT:US) opens more stores in the country.
The combined expansion is expected to generate more than 7,500 jobs over the next year, including construction jobs, Wal-Mart said in a statement today. Last year, Wal-Mart Canada said it planned to spend C$450 million to build stores and renovate other locations in Canada.
Competition in Canada’s retail market is heating up as Target and Wal-Mart expand in the lower price end of the market and retailers like Nordstrom Inc. (JWN:US) and Saks Fifth Avenue enter the luxury segment. The companies are jostling for market share as consumer confidence in Canada fell to the lowest in eight months amid the worst start to the year since at least 1972 for the nation’s currency.
Wal-Mart was little changed at $72.56 at 10:52 a.m. in New York today.
With the planned expansion, Wal-Mart Canada’s store count will increase to 395 by the end of January 2015, with 282 supercenters and 113 discount stores. Minneapolis, Minnesota-based Target said Jan. 29 it would add nine stores in 2014 to the 124 locations it opened in Canada last year.
The Canadian dollar depreciated past C$1.12 versus the U.S. currency for the first time since July 2009 last month on speculation the Bank of Canada may favor lowering interest rates. It was quoted at 1.1087 per U.S. dollar at 10:43 a.m. today, little changed from yesterday.
The Bloomberg Nanos Canadian Confidence Index declined to 56.6 in the week ending Jan. 31 from a previous reading of 57.6, the third straight drop to the lowest since the end of May.
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