Walmart stokes retail competition with first Atlantic Canada supercentre

Shoppers filed into Atlantic's Canada's only Walmart Supercentre early Friday morning, loading their carts with an unlikely mix of everything from radishes, onions and carrots to television sets and back-to-school supplies.

HALIFAX -- Walmart Canada expanded its reach into the fresh food sector by opening its first supercentre Friday in Atlantic Canada, continuing an aggressive bid to win over customers in an increasingly competitive retail market.

Shoppers filed into the Halifax store early Friday morning, loading their carts with an unlikely mix of everything from radishes, onions and carrots to television sets and back-to-school supplies.

Shelley Broader, Walmart Canada president and CEO, said it's all part of the retail giant's mission to allow consumers to buy all of their supplies in one location.

"Our goal is one-stop shopping," she said as people milled around her, filling their baskets with packages of two chickens for $10 and bags of carrots for $1.

"With the addition of fresh food into our supercentre format, we truly are one-stop shopping -- you can get all of your needs met here and it's very core to our strategy."

The massive, 13,500-square-metre store is one of nine supercentres planned for the region and one of 37 projects that will involve expansion, remodelling or relocating existing stores across the country at a cost of $450 million. Walmart will spend about $90 million on the Atlantic expansion in New Brunswick and Nova Scotia, adding 300 positions.

The Halifax project, which the company said created 30 new jobs, means Walmart now has 217 so-called supercentres in Canada and 380 stores in total.

The supercentre adds fresh food to the department store's offerings and puts greater competitive pressure on established grocery retailers, like Sobeys and Loblaws, which has been making inroads in the region with its Atlantic Superstore chain.

Walmart began rolling out the supercentre large-scale stores in Ontario several years ago and continues to add locations as the large U.S. discount retailer Target enters the Canadian marketplace.

John Winter, a retail analyst in Toronto, says Walmart's ongoing expansion and heftier presence on the Atlantic coast will force competitors to lower prices to hold onto their customers.

"They will have to sharpen their pencils," he said. "The market is going to get even more intense. ... It takes a little while for consumers to change their shopping patterns, but certainly with a new entrant in the market there will be change."

Winter says the supercentre model has been "phenomenally successful" in Ontario as consumers come in for clothing and end up walking out with groceries, housewares and other items he calls "collateral purchases."

He says the threat to Walmart from Target might not be great initially as the retailer moves into former Zeller stores that are smaller.

"Walmart with food has an absolutely dominant market share in Ontario, so the addition of food was a key item in establishing dominance in the department store sector," he said.

Despite that, Loblaw Companies Ltd. said Wednesday it anticipates strong growth for the rest of the year even as it braces for increased competition from Walmart and Target.

Target plans to launch approximately 70 new stores in the country before the end of the year, in addition to Walmart's 37 new supercentres.

Both of the chains sell food products, eating into the market share of grocers like Loblaw (TSX:L), Metro Inc. (TSX:MRU) and Empire Company's (TSX:EMP) Sobeys stores.

Loblaw recently acquired Shoppers Drug Mart (TSX:SC) for approximately $12.4 billion, giving it a foothold in urban centres, where many small-format Shoppers stores are located.

Broader said Walmart's expansion plans aren't driven by competitive pressures, but on the needs of customers and where they see an opening.

"Our ability to grow fast is really about the demand that is driven by our customer base," she said. "We aren't competition-focused, we are really customer-focused."