As the Canadian retail sector eagerly awaits tomorrow’s (18 October) opening of Wal-Mart’s first Canadian Supercentre in Ancaster, retail analyst Perry Caicco of CIBC World Markets has said that the entry of the world’s largest retailer into the market could spell trouble for domestic grocers.
“We had a chance to visit the store prior to opening and it is an impressive effort, which we would describe as “discount-plus”” Caicco said. “Despite Wal-Mart’s variety of store sizes, this company will be a formidable grocery entry.”
Wal-Mart is expected to adopt a regional pricing structure that will allow it to compete on price with local operators whilst maximising returns where possible. Caicco also noted that the retailer was continuing with its strategy to appeal to more upmarket consumers, adding a range of natural, organic and premium products to its traditional discount format.
“Wal-Mart’s pricing strategy will be regional, matching discount stores on higher-volume items, but with a slightly wider perishables selection and service counters for bakery and deli. It also seems to be expanding its natural/organic and private labels, possibly adding a premium tier,” Caicco said.