Walmart plans nearly $500 million in Canadian projects

Walmart is opening 35 more Canadian supercentres as part of nearly $500 million in planned investments over the next year as the retailer works to increase competitive pressure on its rivals.

Walmart is opening 35 more Canadian supercentres as part of nearly $500 million in planned investments over the next year as the retailer works to increase competitive pressure on its rivals.

The 2014-15 expansion announced Tuesday will generate about 7,500 jobs, including construction work.

The world’s biggest retailer plans to invest more than $376 million to build, expand, relocate or remodel its stores. It will also spend $31 million for e-commerce projects and $91 million to improve its distribution network to handle more fresh food.

The expansion will increase competition for Canadian retailers — especially grocery, pharmacy and clothing chains — who compete with Walmart as well as other newcomers.

Target Corp. began expanding into Canada last year and online retailer Amazon started to deliver groceries to Canadian customers.

Grocery chains such as Loblaws (TSX:L), Metro (TSX:MRU) and Sobey’s (TSX:EMP.A) have put in place consolidation plans and cut prices to lure in more customers.

Walmart says details on locations for specific store and distribution centre projects will be announced as they become finalized.

“Customers in every region of Canada are looking to save money on their entire list of shopping needs,” Shelley Broader, Walmart Canada’s president and CEO, said in a statement.

The retailer came to Canada in the early 1990s, and has been expanding year after year to become the country’s largest department store retailer by sales.

It’s also one of the biggest employers in Canada with more than 95,000 employees.

Walmart spent $450 million to open or expand 37 additional supercentres in 2013-14.

The company currently has 389 stores, including 247 supercentres that carry a combination of groceries, apparel, and household goods. It expects to have a total of 395 stores by the end of January 2015, with 282 supercentres and 113 discount stores.

Analyst Keith Howlett with Desjardins expects the expansion to include six new stores, with the remaining comprised of nine relocations or expansions and 20 conversions of current locations

Walmart has yet to confirm the specifics related to the expansion.

“Our expectation is that the greatest incremental impact of the supercentres will be in Quebec and Atlantic Canada,” Howlett wrote in a note.

Last week, rival Target announced plans to open nine more stores, with a total of 133 locations expected to be open by the end of the year.

Target has faced high expansion costs and disappointing sales since its highly anticipated arrival in Canada. Shoppers have also complained about near-empty shelves and notably higher prices than at U.S. Target stores.

Target is also dealing with a massive data breach at its U.S. stores that may have affected some Canadian customers

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