Walmart Canada’s struggles to attract more traffic to its big-box department stores continue, new data released Tuesday shows, even as Target bolted for the exit this spring paving the way for potentially more consumers to head for the discounter.
The biggest general merchandiser in the country said sales rose between February and April, but data suggests much of the gain came from customers spending more rather than a big influx of new shoppers.
Traffic was up a tepid 0.1 per cent in the latest three-month stretch, compared to the same period a year ago. That result follows an increase in store traffic of the same size between November and January and outright declines throughout last year (see chart).
Experts chalked up declining traffic last year to the roll out of Target, which opened 133 stores across Canada before saying in January it would shut down.
The last of Target’s Canadian stores were closed in April. Target’s initial liquidation sales in February and March likely drew customers away from Walmart, experts noted on Tuesday.
Spending more
With little in the way of new shoppers, the principal driver of sales growth at Walmart now appears to be grocery, an area the discounter has been pushing heavily in recent years as a means to boost basket size among shoppers — a strategy that appears to be working.
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A 3.7 per cent increase in net sales was “driven by solid Easter sales, strong performance in seasonal, and improving strength in our overall food business, including fresh,” the company said.
Walmart’s store brands or “private label” items, such as Your Fresh Market and Price First saw “significant growth,” Walmart said. “We continue to enhance our value and price offering, especially with private brands.”
Canadian online sales increased 40 per cent compared to a year ago, as well, Walmart said. Walmart Canada had about $482 million in e-commerce sales in 2014, according to a May 4 BMO Capital Markets report, well ahead of most Canadian retailers but trailing some such as Sears, Costco and Amazon.
New stores
Walmart is also buying additional growth through acquiring old Target stores. Walmart said earlier this month it would take over a total of 13 locations operated by Target, focused primarily on major metropolitan areas.
Four are located in the Greater Vancouver area, two in Ottawa, two in Montréal, one in Winnipeg, and two in Québec City. Other locations are in Guelph and St. Catharines, Ontario.
“While these transactions are subject to bankruptcy court approval, we look forward to bringing additional supercentres to more provinces,” the retailer said.
WATCH: Walmart to buy former Target Canada stores
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