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Walmart to continue Canadian expansion push

Walmart to continue Canadian expansion pushA Wal-Mart store in Prince Albert, Sask. is shown on June 24, 2009. THE CANADIAN PRESS/Geoff Howe

TORONTO - Walmart will spend $450 million this year to open several new stores and expand its distribution network in Canada amid what is becoming an increasingly competitive retail landscape in this country.

The U.S.-based discount retailer says it plans on completing at least 37 additional supercentre projects by the end of next January, bringing the total number of Canadian locations to 388.

Nine of those locations will be new stores, with the remainder being conversions of existing properties into Walmart supercentres with a grocery offering.

Although the company refused to go into specifics, it says some of the supercentres slated to open will be in Maritimes, where Walmart isn't currently operating supercentres. The expansion will also create 7,000 jobs — half of which will be retail positions.

Walmart also announced it will be adding 2,000 new private label products to shelves this year, to offer customers more options to brand-name products.

And it will be selling the highly-anticipated BlackBerry 10 from Research in Motion (TSX:RIM), once it launches. A spokeswoman says customers can currently pre-order the device in-store, but models and prices have yet to be released.

President and CEO Shelley Broader says the expansion move is consistent with Walmart's plans to grow its presence in Canada and has little to do with Target opening its doors here next month.

"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."

Although the retail landscape will undoubtedly change, as more U.S. retailers continue to court Canadian dollars, Broader says the company remains confident that it still provides 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 first came to Canada in the early 1990s, and since then has been expanding year after year.

Last year was one of its most aggressive for the discount chain, with the opening of 73 new Canadian locations amid announced spending plans of more than $750 million.

But starting in March, rival Target will open the first of between 125 and 135 locations once owned by Canadian retailer Zellers, from whom Walmart has also purchased a number of locations.

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 (TSX:SC), Hudson's Bay Co. (TSX:HBC), Canadian Tire (TSX:CTC.A) and Loblaw (TSX:L), 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. As part of its plan, it will lower the prices of more items to about $1 as it also answers to the expansion by Canadian dollar store operator Dollarama Inc. (TSX:DOL).

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