Walmart's new world: An interview with Shelley Broader

SHELLEY BROADER, Walmart Canada's boss, breezes into a meeting room at company headquarters near Toronto and smiles. She’s just come from a surprise bash for David Cheesewright, her predecessor as president and CEO.

Cheesewright was recently promoted to head up all of Walmart’s international business. Broader and a few hundred head-office employees packed the company’s auditorium to give him a decent send-off: presents, some jokes at Cheesewright’s expense and, at the end, a resounding chorus of the Walmart cheer. Party over, Broader is all business, and ready to talk about what’s next for Walmart Canada.

A former executive with the American grocery chain Hannaford Bros. and its parent company, Delhaize, Broader arrived at Walmart’s Canadian arm, in 2010, as chief merchandise officer, The next year she was promoted to be Walmart’s Canadian president and CEO after Cheesewright was kicked upstairs.

Since then, she’s overseen a fast-paced expansion of Walmart’s Supercentre program, opening, on average, 35 to 40 Supercentres each year and expanding into new markets: the Maritimes last year on the heels of Quebec, starting in 2011.

Broader is especially bullish about groceries. She swears Walmart won’t open another store that doesn’t sell food, and points to how fast it has ramped up its grocery business. The first Canadian Walmart Supercentre opened, in 2006, in Ontario, and by the end of this year, 282 of its 395 stores will be Supercentres. Walmart is also investing in fresh food this year, with $91 million going to distribution to grow its fresh-food capabilities.

But floor space is no longer the only tool at Broader’s disposal. Walmart is heading online; Walmart.ca relaunched last fall, with packaged groceries now a key part of the online selection. This year, the company will spend $31 million on e-commerce projects.

“We don’t consider our stores and our website to be separate businesses or two separate customers,” Broader says. “Sometimes you’ll come into our store and do your daily or weekly shopping, and other times there may be items or times you’ll want to utilize our e-commerce,” she told Canadian Grocer in a wide ranging interview. Here are edited excerpts:
 

How do you see Canada's grocery business today: more competitive, less competitive, or about the same as it was a year go?

It’s a little bit different region by region, but overall, right now, it’s a competitive landscape. Canada was, for a very long time, more static than other parts of the world. We had a static set of competitors with their own, unique go-to market strategies. But there has been some real upheaval in the marketplace with the entrance of new players, and now the consolidation of other retailers. It’s created a much more hyper-competitive marketplace.
 

It’s been more than two years since you launched Walmart Supercentres in Quebec. Do you feel you’ve been able to lower food prices in that province?

We believe so. Our food prices in Quebec, and Canada as a whole, range anywhere from 8% to 20% less than conventional grocers based on our research and price comparisons. We’ve really loved bringing food to Quebec. The timing of our entrance in Quebec was carefully planned. We wanted to make sure we had a little more experience in food under our belt before we went to Quebec. Customers there are very discerning about food. We put in place a very significant “Store of the Community” project, making sure that all of our buyers connected and purchased as much product as we could from the province.
 

Have your competitors in Quebec lowered prices as well?

We’ve seen some movement in pricing, for sure. But rather than doing everyday low prices, like we do, there’s been increased promotional activity. We’re about lowering prices every day, for everybody, all the time.
 

When Walmart first went into the Maritimes with groceries, last year, you talked a lot about buying local products. What process did you go through to do that?

A couple of different things. But one in particular is that we have 95,000 associates across Canada, and they are astute shoppers. They live and work where our stores are. Before we brought our food offering to the Maritimes, we spent a great deal of time talking to our associates in those provinces. We sat down with them and asked them, What are the brands you know? What are the brands you recognize? So when you come into Walmart and you’re a , you’re going to see the ginger cookies that you grew up with.

READ: Why women love Tim Hortons and Walmart: Study
 

Is there a point where every, or nearly every, Walmart in Canada will be a Supercentre?

That’s what we would like. One-stop shopping is one of the unique parts of our strategy. It’s a proven winner in Canada. Where we’ve added food to our stores, we’ve seen people using them on a much more frequent basis. We will never build another store without food.
 

So when you convert an existing Walmart to a Supercentre...

We increase our traffic.
 

How much?

We don’t say. But it’s enough to make me want to put food in every location that I can.
 

In the U.S., Walmart has several small-store formats it’s working on, such as neighborhood market. Here, you’ve opened a smaller pilot store, called urban 90. Are we going to see more?

We have one Urban 90 store, in Scarborough, Ont. That’s our learning lab. It looks different than the day it opened; it’ll look different probably six months from now. We’re continuing to tweak that model. We do have other stores very much like that in the pipeline. When you look at Vancouver, Toronto, Montreal and Calgary, you’ve got to find a way to serve that urban customer. And I think you do it with a combination of e-commerce and bricks and mortar.

One thing we don’t talk a lot about is being part of Walmart worldwide and having access to an unbelievable smorgasbord of excellence from Walmarts in other countries. You can take your tray down the path and choose a little from Mexico, a little something from India, China and the U.K., not to mention the @WalmartLabs in San Francisco. There are some pretty exciting formats happening around the world.
 

What ideas have you taken from Walmarts in other countries?

Tons of stuff. What we’re doing with e-commerce, for example, and our signage and price checking. We do over 140,000 price checks weekly with a proprietary system that was invented at Asda . We’ve also hired Walmart people from abroad Canada’s diversity and growing South Asian population. We recruited two buyers from Walmart India to help products their connections into the marketplace and vendor base. Another example, for Chinese New Year, our community buyers called up Walmart China and said, “Send us your Chinese New Year products.” They the authentic items for our customers here.
 

You relaunched your website last fall and now you’re selling groceries on it. What are people buying online from Walmart?

It’s a combination of convenience and variety. We’re selling a tremendous amount of specialty and gluten-free products. And then, opposite of that are diapers, paper towels, health and beauty care–routine purchases that somebody needs on a regular basis.

In the past, retailers were naïve in thinking the online consumer was different than the bricks-and-mortar consumer. We came to realize that everyone lives in all those occasions. Sometimes you are a bricks-and-mortar consumer, sometimes you are an online consumer, and sometimes you are a hybrid. We need to be flexible to offer all of those options to our customers.

READ: Walmart Canada redesigns its website, just in time for holidays
 

Will Walmart deliver fresh groceries in Canada in the next five years?

Let me ask you, Do you believe that customers in downtown Vancouver will want fresh product delivered to their homes in five years?
 

I would say, yes.

Then why wouldn’t I choose to deliver to them? It’s not about whether we decide to do it or not, it’s whether the customer wants it. Are we choosing to meet the needs of an evolving consumer, or not? And I say yes, we are.
 

Some retailers have stopped publishing their own magazines, but last year you launched Walmart Live Better. Why?

Initially it was to talk about our brand and what our brand is famous for: saving people money every day. We wanted to bring that brand alive and show how selling products at unbeatable prices can resonate in a home environment–how you can cook and provide delicious food for your family, whether you’re on a budget or just really value-conscious.

We had a fancy-looking coconut-lemon cake on the inaugural cover, and we must have gotten 50 pictures of that cake that our customers made. My favourite was who said, “I know you think this is a picture of your cover. But it is not. This is the cake I made!”

READ: Walmart Canada gets into the magazine game, too
 

Does the magazine drive sales?

Yes, it does.
 

Are there any interesting consumer trends you’ve noticed lately?

There is one. I find a very different time scale in the minds of consumers today about shopping for holidays and events. Perhaps because we’re all so busy, it seems that holiday shopping happens a lot closer to the actual event now, whereas before the time frame for buying was much longer. For holidays like St. Patrick’s Day or Halloween or Valentine’s Day, you can watch how that purchase pattern has changed. The dollar value and the units may not have changed overall, but the time in which those units go through our stores is incredibly consolidated now. There are high peaks in the business closer to the event.

I also think there’s a special skill Canadian consumers have, and that is: stated importance versus derived importance. What a Canadian customer says is important to them will in fact drive their purchasing behaviour. In other parts of the world people say things aspirationally but it doesn’t necessarily drive their purchasing behaviour. So when customers say they want to eat healthier or be more frugal around this particular event, a lot of times you have to be very careful around consumer research to interpret it correctly. But here in Canada you can be a lot more literal with the interpretation.
 

Do you ever go into stores and just watch how customers shop and talk to them?

All the time, our stores and our competitors’ stores. I talk to customers in our stores and sometimes the store managers will say, “You gotta leave these customers alone .” Our customers have incredibly educated opinions on our business. We’re not an auto factory. People could walk into a car factory and not know a lot about it. But they’ve visited our stores and our competitors’ stores thousands of times. There are very few other businesses where your customer base is as well educated on a product as ours. So you really have to listen to them. CG