Wal­mart launches free pickup of on­line mer­chan­dise

Windsor Star - - FINANCIAL POST - HOL­LIE SHAW

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.

Dar­ryl Porter, vice-pres­i­dent of om­nichan­nel and on­line gro­cery Wal­mart Canada said at the eTail Canada in­dus­try con­fer­ence on Thurs­day the mea­sure will save on­line cus­tomers 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, he added. Wal­mart’s cus­tomers can cur­rently pick up food or­ders for free at its stores of­fer­ing on­line fresh gro­cery items, but un­like the store-picked 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 data. 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. It be­gan sell­ing gro­ceries in Canada in 2006.

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-overyear, it was not clear if that re­flected the net neg­a­tive im­pact of the pend­ing sale of Wal­mart Canada Bank, Howlett noted, which gen­er­ated a loss of US$81-mil­lion and the gain on sale of land of US$51 mil­lion.

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