Wal-Mart to Open 11 Canada Units, Complete Expansion - Analyst Blog
Retail giant Wal-Mart Stores, Inc. (WMT) announced that it will open 11 supercenters by Jan 29 across Canada. This will complete its previously announced plan for opening 35 supercenters in the region by Jan 2015. Once completed, Wal-Mart Canada will have a total store count of 394, including 280 supercenters and 114 discount stores.
In February, last year, Wal-Mart had reportedly announced its intention to invest nearly 500 million Canadian dollars (approximately $451 million) over 2014. Of the total investment, more than C$376 million was allotted for store projects, C$91 million for distribution networks to expand fresh food capabi0lity and C$31 million for e-Commerce projects. This expansion plan boosted Wal-Mart’s presence in Canada, creating more than 7,500 jobs, including construction. (Read: Wal-Mart to Invest in Canada, Create Jobs)
Wal-Mart started operating in Canada in 1994. The expansion project comes at a time when most retailers are closing their operations in the region. Last week, Target Corp. (TGT) announced its decision to wind up its unprofitable Canadian operations less than 24 months after foraying in the country. After a comprehensive evaluation of the business, it was concluded that attaining profitability in the region was not possible before 2021, which compelled Target to focus on its domestic business.
It seems that the supermarket chain is focusing on expanding its stores globally.The company has more than 11,300 stores under 71 banners in 26 countries and has wholly-owned operations in Argentina, Brazil and Canada. Walmart also has operations in the United Kingdom, South America and China.
Though we are impressed with the company’s business strategy to expand and boost consumer confidence by providing jobs, the retail giant remains under pressure. The Zacks Rank #3 (Hold) is currently grappling with sluggish sales and a tough macro-economic environment.
Stock to Consider
Investors may consider retail stocks such as Ingles Market, Inc. (IMKTA), sporting a Zacks Rank #1 (Strong Buy) and The Kroger Company. (KR) carrying a Zacks Rank #2 (Buy).
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