* Three Quebec locations to be converted into supercenters
* Will have 164 supercenters in Canada by January 2012
* Wal-Mart moves before Target enters market
(Updates with details, comments, background)
By Solarina Ho
TORONTO, March 30 Wal-Mart Canada (WMT.N), said
on Wednesday it plans open three more supercenters in the
province of Quebec this year, the latest move by the behemoth
to get ahead of U.S. rival Target before Target opens its doors
Wal-Mart, which currently operates 325 stores in Canada,
stepped up its supercenter plans following the long-awaited
announcement that U.S. discount chain Target Corp (TGT.N) would
finally debut north of the border. By January 2012, Wal-Mart is
expected to have 333 stores, including 164 supercenters, in
Target announced in January that it plans to open up to 150
stores in Canada by 2014 by taking over leases of Canada's
"It's going to be a while before (Target) gets their stores
up and running. My sense of Wal-Mart in Canada this year is a
full-fledged supercenter onslaught," said Brian Sozzi, an
analyst at Wall Street Strategies, noting that Wal-Mart wants
to boost its food sales, particularly as traffic at its
Canadian stores is falling.
Wal-Mart Canada, a unit of the world's biggest retailer
Wal-Mart Stores, has been ramping up expansion plans in Canada,
where retail sales have been stronger than in the United States
and where competition has been heating up as more U.S.
retailers enter the market.
"Canada is much healthier in terms of retail even though
it's not a barn-burner by any means," said Ed Strapagiel,
executive vice president at KubasPrimedia, a consulting firm.
"There's a whole list of U.S. retailers on their way to
Canada or seriously considering it. Yes, that's going to put
some pressure on the incumbents, whether they are
Canadian-owned or U.S.-owned."
Wal-Mart said it was converting its Vaudreuil,
Saint-Eustache and Saint-Jerome locations into supercenters
this year, adding to three other Quebec locations already set
to open this summer. The company announced the province's first
supercenter in January, when it unveiled plans to open 40 more
of the large-format stores in Canada. [ID:nSGE70P04W]
It already has 128 supercenters -- which are Wal-Mart
stores with the addition of full-service supermarkets -- in
Ontario, Alberta, British Columbia and Saskatchewan.
"Canada is a hidden gem inside Wal-Mart. I think it's a big
opportunity for them and they have to get the supercenter
roll-out correct," Sozzi said.
The company's expansion in Quebec, Canada's second most
populous province, has had a rocky history. The company closed
a store in Jonquiere, Quebec, several years ago after a union
was certified to negotiate a collective agreement.
Wal-Mart, which employs 85,000 workers in Canada and two
million worldwide, is no stranger to labor problems. It is
currently embroiled in the largest class-action
sex-discrimination lawsuit in history. [ID:nN29275341]
Analysts don't foresee any more major labor problems ahead
in Canada, although minor snags may arise.
"I think any time when you a company expanding as
aggressively as they have -- and Wal-Mart being quite large --
you can't rule something like that out," Sozzi said.
(Reporting by Solarina Ho; editing by Peter Galloway)