Walmart Canada gets boost from grocery

Canada continues to be a bright spot for Walmart, but its growth seems to have slowed.

Net sales for Walmart in Canada rose 2.9%, the retailer reported on Thursday, and same store sales grew 1.1%. That's compared to net sales of 8.6% and same store sales of 6.7% in the previous quarter.

Brett Biggs, EVP and CFO noted in an analyst call, that despite increased promotional activity by its competitors, comp sales have been positive for nine consecutive quarters.

"We continued to gain market share in food and consumables and health and wellness," he said.

According to Nielsen data, Walmart Canada gained 60 basis points of market share in food and consumables and health and wellness for the 12-week period ended July 23rd.

Sylvain Charlebois,  a professor in food distribution and policy at Dalhousie University, noted in a recent interview that traditional grocers like Metro and Sobeys are facing greater competition from the likes of retail giants like Walmart and Costco.

Walmart Canada has ramped up its marketing for fresh items. "You know Walmart for paper towels," reads one ad. "Discover our fresher side."

 





 

Biggs said Walmart will continue to execute aggressive cost reduction programs in the U.K. and Canada, and is expanding cost analytics programs into other markets like Mexico and China.

"We also announced market CEO moves this quarter in China, the U.K. and Canada," he said." We are confident these moves position us well for driving improved performance in each of these markets and demonstrate the depth of our talent globally."

Dirk Van den Berghe, former president of Walmart Canada, was reassigned to Walmart's China operations in June.

A presentation that accompanied the call noted that Walmart Canada's ecommerce business also continues to grow, and the expansion of online grocery to the Toronto metro area is performing well.

The company raised its earnings outlook for the year on Thursday and delivered strong profit and sales for the second quarter, as moves to improve the store and online experience are winning over customers.

In the U.S., Walmart has launched a flurry of changes, from making sure vegetables look good to cleaning up the stores to being sharper on keeping prices low. It's melding online services with the stores—rolling out a mobile payment system to speed checkouts. And it's pressing ahead with online grocery and pick-up services.