Toronto -
Wal-Mart says it will create up to 6,500 jobs in retail and construction this year as part of a plan to open 35 to 40 massive supercentres in Canada.
A spokesman for the world's largest retailer said more than half of the locations will be entirely new stores or relocations and expansions. The remainder will be renovations of existing store layouts.
Wal-Mart's investments will add up to almost half a billion dollars, creating 2,000 jobs in construction and 4,500 employee positions at the retail stores, spokesman Andrew Pelletier said.
"We will be confirming the specific markets later in the year as we get closer to beginning these projects," he said, though he declined to offer a targeted start date.
Wal-Mart has been slowly rolling out its supercentres in Canada over the past few years. The concept combines its traditional retail layout with a wide array of food items, including produce and dairy.
The supercentres are intended to lure consumers away from supermarkets and into Wal-Mart stores for most of their shopping list.
That puts the American retail giant in direct competition with Canadian grocery chains Loblaw (TSX:L), Metro and Sobey's. For their part, the Canadian chains have been introducing general merchandise into their selling spaces in a bid to remain competitive with Wal-Mart and other big box retailers.
Wal-Mart said the new additions will bring its total number of stores in Canada to 325 from 280, which includes 124 supercentres. It already employs more than 70,000 people in this country.
Wendy Evans, head of retail consultancy Evans and Co. Consultants Inc. said the supercentres have been a successful engine of growth for the company and it is a strategic time for Wal-Mart to go through with the rollout.
"There are probably more location opportunities now than in the past quite a few years as a result of the recession," she said.
Evans said the chain has already ramped up openings of supercentres in Western Canada and expect it will now focus on Eastern Canada. She added while Wal-Mart would like to expand into urban centres, there is little space and money for it to do so, and it will likely remain focused on suburban locations.
Evans said the move puts pressure on other retailers and raises the stakes in an already competitive battle for market share, one that will likely trigger price wars.
"They're well over 100 and sometimes 200 thousand square feet, and so this is a very powerful draw for consumers who like to test out the new stores, and that's obviously taking some traffic away from existing stores."
She said Loblaw has generally reacted aggressively by lowering prices as Wal-Mart has opened supercentres in competition with its locations.
Loblaw has also announced it will spend $1 billion on store renovations and infrastructure upgrades and will revamp another 200 stores across the country in 2010 after already completing renovations at two-thirds of its stores.
Evans said while the creation of 6,500 jobs is generally good for employment, the downside is that it could drive some smaller businesses to shut their doors.
Earlier this month, Wal-Mart announced separate plans to open a refrigerated distribution centre in Balzac, Alta., this fall, creating 1,400 jobs. Last year, the company laid off 1,200 people when it pulled its Sam's Club stores out of Canada.
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