Walmart Launches Preemptive Strike in Canada
In an apparent early move in preparation for Target’s planned entry into Canada in Spring 2013, Walmart Canada last week announced a program to lower prices on 10,000 products in July. The sale, which promises to save customers $50 million next month, is said to be the biggest in Walmart Canada’s 18-year history.
Walmart Canada earlier in the week announced plans to open 47 hiring centers in efforts to add 4,000 new employees over the next two years. By the end of 2013, the company expects to spend some $750 million to open, relocate or remodel 73 stores. Included in the projects are most of the 39 former Zellers stores for which Walmart Canada purchased leasehold rights in June 2011 and which will reopen as Walmart stores in this fiscal year.
Walmart, which entered the Canadian market in 1994, has 333 stores in the country.
The campaign to lower prices covers about 3,000 grocery store items, from dry goods to fresh produce, apparel, electronics, health and wellness products, hardware and home merchandise. The campaign launches June 29 and runs throughout the month of July.
"We are committed to lowering the cost of living for shoppers this summer," said Lee Tappenden, chief merchandising officer for Walmart Canada, in a statement. "The common theme we hear is everyone is looking and needing to save money now, before the autumn back to school season begins."
In January 2001, Target acquired lease rights to 220 Zellers stores from the Hudson’s Bay Co. for $1.825 billion. So far, 110 Target sites have been announced for 2013.
- Walmart Canada Drops Prices on More Than 10,000 Products in Largest Summer Rollback Pricing Campaign in Retailer’s History – Walmart Canada
- Walmart Canada Launches Hiring Spree – Walmart Canada
- Walmart to reduce Canadian prices in advance of Target invasion – Bloomberg News/Vancouver Sun
- Walmart Canada to offer summer discounts – Reuters
- Target Store Locations in Canada – Target
- Target Corporation to Acquire Interest in Canadian Real Estate from Zellers Inc., a Subsidiary of Hudson’s Bay Company, for C$1.825 Billion – Target
Discussion Questions: What steps should Walmart be taking to protect its position in Canada? What are the pros and cons of launching price wars to fend off new competition?