Why Do Millionaires Prefer to Shop at Walmart in Canada?

Jun 11, 2013

Over the years, Walmart has attempted to attract a more upscale audience in the U.S. When its efforts have fallen short, Walmart has been accused of losing sight of its core customer base.

The same issue does not appear to have dogged Walmart in Canada, according to new research by Ipsos Reid, which found that 72 percent of Canadian households with $1 million or more in investable assets (not including their home or personal possessions) have shopped in the retailer’s stores over the past year. That’s a higher percentage than have shopped at The Bay (70 percent) and Sears Canada (54 percent) during the same period.

So why does Walmart, which claims to get at least one visit a month from 60 percent of American households, attract such affluent shoppers in Canada while apparently failing to do so in its home country? Is the answer more about how Walmart is different in the two countries or about the differences in how affluent Americans and Canadians shop?

The primary factors behind where Canadian millionaires shop, according to Ipsos Reid, are:

  • High quality products (94 percent);
  • Price/budget (88 percent);
  • Good range of different brands (87 percent);
  • Proactive customer service (65 percent);
  • Unique product selection (59 percent);
  • Latest trends/hottest labels (21 percent) and designer labels (18 percent).

Respondents named "good value for the price" most often as the leading why behind their buys. Across one category after another — clothing, computers, cosmetics, wine, etc. — value was given as the top reason for choosing a particular brand.

In an e-mail to RetailWire, an Ipsos spokesperson said the company has not conducted research similar to the Canadian study in the U.S.

What is it about Walmart, the Canadian retail market and/or affluent consumers in that country that attracts millionaire households? Is there anything Walmart is doing in Canada to attract more affluent consumers that it could import to the U.S.?

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14 Comments on "Why Do Millionaires Prefer to Shop at Walmart in Canada?"

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Rick Boretsky
Rick Boretsky
4 years 4 months ago

Everyone likes to shop for good quality at the best price; Canadians and Americans are very much alike in this aspect. I think these findings are more a reflection of the Canadian retail landscape. With limited high-quality discount retailers, Walmart has a strong foothold on the Canadian market. It has many locations, with abundant parking, near Metro (subway) stops, and a wide variety/selection of merchandise. Compared to The Bay or Sears, it is difficult to even think of more than handful of locations. Basically the competition to Walmart in Canada is negligible. Probably only Winners (TJX’s Canadian counterpart) comes close.

With the recent entry of Target, this will change. If we continue to see an influx of high-quality discount retailers from down south, then the percentages of affluent shoppers visiting Walmart will match what you are seeing in the U.S.

Ryan Mathews

Competitive options and culture!

Look, Canada is hardly all tundra and fur trappers. Cities like Toronto, Montreal and Vancouver are as sophisticated and hip as cities get, but a lot of Canada is not as urban and doesn’t offer shoppers, even rich ones, the same broad range of physical retail choices.

Also, the American market strikes me as a tad more pretentious and, in some senses, therefore, less practical. If a retailer is selling a wide selection of high-quality items at low prices, why wouldn’t you shop with them?

Oh, that’s right, you’re worried the neighbors will see the Walmart bag. Of course!

I say—once again—high marks for Canadian practicality! If you are sure about who you are, why should you care where you shop?

Steve Montgomery

I doubt that higher net worth individuals were Walmart’s target customers when entering Canada. However, they found themselves in a market where retail options were fewer than here in the U.S., and shopping at their locations didn’t carry the “stigma” that some have put on shopping at Walmart.

Ian Percy

On behalf of Oh Canada, I’d like to thank Ryan for his insightful and brilliant assessment of the Canadian mindset. We are a practical people and among the world’s most humble and unassuming. Carry a Walmart bag? Sure…all the way to the bank.

David Livingston
4 years 4 months ago

First, it doesn’t take much to be a millionaire these days. Just about anyone can be a millionaire if they choose to. My guess is Canada does not have high concentrations of millionaires like in Manhattan, Chicago’s gold coast, San Francisco, Beverly Hills, etc., where you have multi-millionaires by the tens of thousands. Very difficult to open a Walmart in those areas, so Walmart is not as accessible.

In Canada, I really don’t know of any areas where the millionaires have been separated from the mainstream in high concentrations. However, I do think your standard, everyday millionaires in the USA do shop regularly at Walmart, such as farmers, small business owners, and upper middle class suburbanites.

Camille P. Schuster, PhD.

I am not familiar with how Walmart presents itself to Canadian consumers. However, when Walmart started in the US and for the next 30 it presented itself to US consumers as the company offering products that rich people buy for ordinary people and offering low prices always. It worked. They created the image of low prices for ordinary people. Trying to change that image after 30 is very difficult.

John Karolefski

The research tells me less about what Walmart is doing right and more about the character and mindset of affluent Canadian shoppers versus American counterparts. The former seem to be practical and less concerned about what others think. The latter seem to be, er, the opposite.

Craig Sundstrom

Not to be a spoilsport here, but I find the premise—that WMC “attracts” millionaires—unsupported. Visiting some retailer once a year doesn’t make you much of a customer…and what is the comparable figure for the U.S.?

Of course the premise MAY be true, in which case I would think lack of competition has much to do with it. Walmart, Target, Fred Meyer, Macy’s, Dillards, and of course dozens of specialty reatailers with a gazillion square feet per capita…does Canada have a similar level of (over)development?

Ed Rosenbaum

Could a reason be affluent Canadian shoppers are not afraid to be seen shopping at Walmart? Whereas American affluent shoppers have a negative attitude about being seen shopping in a Walmart?

Shilpa Rao

There are many things Walmart is doing right in Canada:

  1. Localized assortments: You could easily spot over a hundred differences between a square one store in Missassagua and a Brampton store, both tailored to local demographics. One could find ethnic products that could not be found in other local stores.
  2. Supply chain: They have stores where that’s the only source of supply and sometimes trucks from the DC could take over 7 days to reach, thanks to the weather.
  3. Quality: The quality of the products is good and way cheaper than other competitors, it’s more dear than the US due to taxes, yet it is cheaper.
  4. Apparel: George as a brand is able to churn out good designs, with quality at low cost.
  5. Culture: The cities especially have a large immigrant population, who do not necessarily perceive Walmart as a “cheap” brand. Everyone wants to save money so they do shop at Walmart.
Anne Bieler
Anne Bieler
4 years 4 months ago

The discounter retail options are limited in Canada; small population and higher costs of doing business. In general, products are about 15% higher than in the US, and assortments are limited. Canadians understand value “worth the price,” and would likely purchase identical or similar items available from more than one retailer at the lower price. Interestingly, Sam’s Club exited after 5 years in the Toronto area—Costco was too well entrenched.

Herb Sorensen

Just a guess, but I think that in the US market, Walmart is suffering from a serious image problem that is exacerbated by the unattractive appearance of a substantial number of Walmart customers and the long-time slandering by the faux-consumerists who hate the company.

I don’t know Canada that well, but I would guess that Walmart carries less “baggage” there. I know an awful lot of people are shocked to find out that Costco is the number one seller of fine jewelry in America. Ditto for fine wines. Get a clue! Rich people like to save money, too. Walmart can dig out of this US image hole, but it won’t happen accidentally.

Alexander Rink
4 years 4 months ago

Previous comments have hit on probably most of why more affluent consumers in Canada shop at Walmart than in the States: a combination of fewer higher-end retailers in the Canadian market, more dispersed affluent areas, less stigma attached to the brand, and potentially a higher level of frugality all contribute to Walmart attracting a higher percentage of affluent Canadian shoppers.

John McNamara
John McNamara
4 years 4 months ago

Walmart Canada is primarily a suburban supermarket (following its 1994 acquisition of Woolco), selling to middle class Canadians who live in homes that have seen unprecedented valuation increases over the past two decades, making them millionaires.

In the US, Walmart is still largely exposed to very small rural markets and demographically stratified areas that wealthy urbanites would rather avoid, in part due to the large choice of alternatives closer to home.

On the other hand, I wouldn’t be surprised to see these same wealthy Canadians take regular trips across the border to shop at US Walmart outlets and take advantage of a much broader selection and significantly cheaper prices of arguably better quality.


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