National Post (National Edition)
AS SAME-STORE SALES JUMP, WALMART CANADA LAUNCHES FREE PICKUP ON ONLINE ORDERS.
TORONTO • Customers will be able to pick up Walmart. ca merchandise at the retailer’s stores across the country as the big-box giant battles Amazon.com Inc. and Canadian Tire Corp. Ltd. with its digital offerings.
The news came as Walmart Canada reported Thursday that same-store sales rose 2.6 in the first quarter as the retailer lowered its food prices to battle the country’s grocery retailers.
“Customers are coming to the store for their regular shopping anyway, now they can get extended aisle product that might not be in the (closest) store picked up at that location,” Darryl Porter, vice-president of omnichannel and online grocery Walmart Canada said at the etail Canada industry conference on Thursday, noting the measure will save online customers any shipping costs associated with home delivery. It will also help the mass merchant drive up sales in markets where it does not have a large retail presence.
“This gets us into Thunder Bay and Sudbury, and gets us into these markets where customers are underserved,” Porter said.
Walmart’s customers can currently pick up food orders for free at its stores currently offering online fresh grocery items, but unlike the storepicked model used for food, Walmart’s online merchandise orders destined for store pickup will be sourced from its warehouses.
Canadian Tire, which has been experimenting with home delivery of online orders in the Ottawa area, has offered free pickup of items sold online to customers at their local store.
Beyond its roots in general merchandise, Walmart has been steadily encroaching on traditional food retailers’ business in Canada, where the retailer saw net sales rise 2.9 per cent in the first quarter and store traffic increase by 0.8 per cent. Walmart Canada’s market share of food, consumables, and health and wellness items increased 70 basis points in the period, according to Nielsen.
“In Canada, we’re investing in price and customers are responding as we continued to gain market share in key traffic driving categories like food and consumables,” Doug Mcmillon, Walmart Inc.’s chief executive, said in a statement.
The news came after a report last week from Kevin Grier Analysis and Consulting that revealed sales of food at traditional grocery and convenience stores were flat last year, while food sales at general merchants such as Walmart and Costco soared 15 per cent in 2017. BMO estimates that Walmart now accounts for 10 per cent of grocery sales in Canada, up from a market share of nine per cent in 2013.
Keith Howlett, retail analyst at Desjardins Securities, said in a note to clients that Walmart Canada’s pace of adding new grocery square footage by converting its discount stores into Superstores has slowed down and the retailer’s focus had shifted to expanding its online offerings.
But in terms of grocery retail market share, “it appears that the discount segment is continuing to increase market share at the expense of the conventional grocery store segment,” Howlett added.
While the retailer’s parent company also noted that operating income in Canada declined year-over-year, it was not clear if that reflected the net negative impact of the sale of Walmart Canada Bank, Howlett noted, which generated a loss of Us$81million and the gain on sale of land of US$51 million.
Toronto-based financier Stephen Smith is acquiring Walmart Canada Bank through his private holding company, First National Securities Corp. in partnership with Ny-based Centerbridge Partners, sources confirmed.
Of Walmart’s 410 stores in Canada, 334 are Superstores that sell a full selection of grocery items and 76 are traditional discount stores.
Porter said Thursday that the lightning pace of digital development can sometimes pit one initiative against another to see which works better. After launching a testmarket grocery delivery service to the lobby of a group of condos in Toronto last year, two months later the retailer launched crowdsourced delivery in the same areas.
“It didn’t make sense for customers to come to the lobby and pay $10 for a (condo delivery) when the crowdsourced delivery had the same features and for $10 would deliver right to their door,” Porter said. “We disrupted ourselves out of a business model.”