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Fresh gives Walmart Canada a sales boost

A focus on e-commerce and competitive pricing helps lower operating costs

Success in e-commerce and fresh food helped tick up Walmart’s sales in Canada 2.1% in its fourth quarter.

The retailer’s same-store sales grew 1.8%, making it the third consecutive quarter of positive sales. Foot traffic also saw a small increase of 0.1%.

An increased investment in grocery and e-commerce has helped boost profits for the retailer.

After a strong holiday season overall, Walmart Canada says online sales were up 38.5%, and continued investment in e-commerce and pricing helped lower operating costs. In a recent report, BMO analyst Peter Sklar noted the company generates about $300 million in annual e-commerce revenue, while the total e-commerce market is $16 billion to $20 billion.

In today’s analyst conference call, David Cheeswright, Walmart International’s president and CEO, pointed to the success of Walmart Canada’s “grab n’ go” service which was introduced last year.

“Overall, we’re pleased with the positive sales trend we’ve seen in our Canadian operations and we expect the momentum to continue,” said Cheesewright.

Cheesewright also made a point in saying the Canadian division’s sale of fresh food reached its highest level of the year.

This success in fresh and e-commerce is likely why Walmart Canada has opted to spend $75 million this year on distribution, including the construction of a new fresh food warehouse and its first two e-commerce warehouses.

In an announcement last week, Walmart Canada also revealed it would be spending $230 million this year to open 29 Supercentre stores, which unlike Walmart’s traditional discount format, carry a full line of groceries.

Walmart Stores Inc. reported a 12 per cent increase in profit for the fourth quarter. It announced it would be spending more than a $1 billion this year on a package of initiatives that will increase pay and enhance training for its 1.3 million U.S. It includes a pay raise for 40% of its U.S. workers, about 500,000 people, in the next six months.

Same-store sales rose 1.5 per cent at Wal-Mart stores, which make up 60 per cent of the company's sales. That's a big jump from the 0.5 per cent increase that it had in the previous quarter.

The holiday quarter marked the first positive quarter since the third quarter of fiscal 2013. The company reported fourth-quarter earnings of $4.97 billion, or $1.53 per share in the quarter ended Jan. 31. That compares with $4.43 billion, or $1.36 per share, a year earlier.

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