With Target on the way, Walmart keeps building Supercentres

After spending a record $750 million on new-store construction and renovations last year, Walmart Canada is dialing back capital investments a tad for 2013.

On Tuesday the company said it would spend $450 million over the next year on expansion of its stores and distribution network.

All in all, 37 Supercentre projects are planned–nine of which will be new stores and the remainder remodels or relocations of existing stores.

By the end of January 2014, Walmart expects to have 388 stores in Canada, up from 379 as of the end of this month.

The total additional square footage added will be 1.4 million square feet.

As expected, Walmart confirmed that the Supercentre format is being introduced to the Maritime provinces this year.

Supercentres have a complete grocery store, including fresh, bakery and meat department. Traditional Walmart discount stores sell mainly dry groceries.

Walmart introduced the Supercentre format to Canada in 2005, first in Ontario, then to Western Canada. It was brought to Quebec two years ago.

“We’re truly delighted to be adding a full grocery section to more locations across the country, including our first supercentres in the Maritimes,” Shelley Broader, Walmart Canada’s president, said in a press release.

Walmart isn’t yet disclosing specific locations for the 37 Supercentre projects. Nor is it giving details of the investment in distribution.

Presumably, Walmart intends to open a new distribution centre, but a spokesperson did not confirm whether that was the case.

Walmart said the $450 million invested over the next year will create more than 7,000 store and construction jobs.

As part of its expansion plan, the company says it will also be adding 2,000 new private label products to shelves this year to offer customers more options and value to brand-name products. It will be also be selling the highly-anticipated BlackBerry 10 from Research in Motion, once it launches.

President and CEO Shelley Broader says the expansion move has little to do with its U.S. rival, Target, opening its doors here next month but added that the arrival will add to changes in Canada's discount retail market.

``Any time there is something new that happens in the market, any time there is a new competitor, what it should do is make you sharper, make you stronger and make you more focused on your core strategy,'' she said from the company's head offices in Mississauga, Ont.

``We're only becoming a better Walmart, a better low-cost operator, a better low-priced operator, a better one-stop shopping destination for our customers, based on exactly what they're telling us.''

As more U.S. retailers continue to court Canadian dollars, Broader says the company remains confident that it can still provide customers with the best bang for their buck.

``The way that we look at the market isn't really based on any specific competitor or series of competitors,'' she said.

``The way we look at the market is completely focused on the voice of our customers. And we listen to them every single day. What we offer and our dedication to low prices is completely based on what we hear out of the mouths of our consumers.''

Walmart has become the country's largest department store retailer by sales.

Over the last few years Walmart has added 35 to 40 Supercentres per year, so this year’s 37 store projects are in line with that growth rate.

Last year the company undertook a record 73 projects. Thirty-nine of those stores, however, were conversions of former Zellers stores.

Walmart had taken over the leases of those stores from Target Corp, which is coming to Canada in March with the takeover of more than 120 Zellers stores.

Starting in March, rival Target will also be opening the first of between 125 and 135 locations also once owned by Zellers.

Target is spending about $10 million per store to upgrade and in some cases triple the existing square footage.

Although most retailers are quick to say they're unfazed by the entrance of the U.S. retail giant, some, including Shoppers Drug Mart, Hudson's Bay Co., Canadian Tire and Loblaw, have scrambled in the past year to become more competitive. Steps have ranged from job cuts and management shakeups to capital raising and making renovations.

Walmart Canada has previously said it is confident it's prepared for Target's arrival. And it said it planned on lowering the prices of more items to about $1 as it also answers the expansion by Canadian dollar store operator Dollarama Inc.

Not all of Walmart’s 73 projects for 2012 are finished as of yet. Walmart’s fiscal year end is Jan. 31.

Before the end of January, Walmart is planning 11 Supercentre grand openings. Nine of those will take place this Friday and two next Thursday.