More Canadian shoppers turning to Walmart amid shaky economy

Both traffic and average basket size are up at Walmart Canada. Credit/THE CANADIAN PRESS

The economic downturn gripping wide swaths of the country appears to be driving more shoppers to the world’s largest retailer.

Walmart said Thursday that both traffic and the average amount spent at its 400 or so Canadian stores, or “supercentres,” are up as the retail giant, whose hallmark is being the least expensive option for consumers, continues to improve its grocery offerings and make “price investments” – i.e. reducing how much it charges on key products.

“I’m especially pleased with our sales in Canada, given the economic pressures in the oil-producing provinces,” David Cheesewright, head of the international division of the U.S. company, said Thursday.

MORE: Forget cauliflower, celery leads pack of runaway food prices

Traffic to Canadian locations was up 2 per cent in the latest three-month stretch, while the average basket size – or amount spent – grew by 2.3 per cent, Walmart said. Part of that increase is likely attributable to rising food prices, experts say.

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But there’s been an undeniable movement by some shoppers to buy lower-priced options as economic pressures ripple into an increasing number of Canadian households.

‘There’s a bit of a shift to discount in a tougher market.”

“There’s a bit of a shift to discount in a tougher market. We’ve seen some of that,” Eric La Flèche, the head of Metro Inc., the country’s third-largest supermarket operator, said last month.

Metro is seeing “faster” growth in sales at its discount banners, Food Basics and Super C, compared to its flagship Metro stores, La Flèche said.

MORE: Discount supermarkets seeing more traffic as food prices take off

A string of shaky economic signals of late – notably the sustained plunge in oil prices as well as the loonie – has shaken consumer confidence, and perhaps prompted some household belt-tightening, experts say. The loonie’s plummet has also sent produce prices soaring by 13.3 per cent.

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Walmart’s Cheesewright said the retailer captured more sales of food, consumables and health and wellness products from Canadian rivals through the 12 weeks ending Jan. 23, according to Nielsen.

Those who aren’t headed to a discounter are making other decisions to save money, too.

“We’re seeing sales of other items, like frozen vegetables for example, up quite substantially when [customers] see fresh product being too expensive,” Metro’s La Flèche said.

“People do substitute.”