Walmart Canada has announced an ambitious plan to invest C$6.5 billion (approximately $4.51 billion) over the next five years. This extensive expansion aims to significantly grow the retailer's footprint across the country, modernize its supply chain, and improve services to Canadian customers.
Details of the plan were shared on Thursday, highlighting the opening of dozens of new Walmart locations. This investment is noted as the largest commitment Walmart Canada has made since entering the Canadian market 30 years ago. According to the company, new stores will open later this year, with specific locations including Port Credit and Oakville, Ontario. By 2027, Walmart expects to launch three more locations, set for Edmonton, Fort McMurray, and Calgary.
"Walmart Canada is on an ambitious growth strategy to serve even more Canadians – more effectively and differently than ever before," stated Gui Loureiro, the regional CEO for Walmart Canada, Chile, Mexico, and Central America. The retailer is not only focused on opening new stores but is also taking strides to modernize its logistics and supply chain infrastructure.
Part of the expansion includes the opening of the Vaughan Distribution Centre, which is slated to be the company’s most advanced facility. This distribution center is set to open this spring and plays a key role in contributing to Walmart Canada's logistics improvements.
The investment also demonstrates Walmart's confidence following its previous $3.5 billion investment announced back in 2020, which included numerous store enhancements and the establishment of multiple distribution centers. This follow-up investment indicates the retailer’s strong performance and proactive initiative to penetrate the competitive Canadian retail market even more deeply.
Retail analyst Lisa Hutcheson commented on the new investment, saying, "This seems like the next step; they’re experiencing so much success from the previous investment." Hutcheson, managing partner of retail strategy at J. C. Williams Group, expressed this expansion as Walmart's measure to leverage its growing customer base and sales success.
Another significant element of this expansion is Walmart Canada's decision to sell its dedicated transportation operations to Canada Cartage. This move aims to streamline logistics by outsourcing its fleet services to third-party carriers. Although the retail giant did not specify the sale's value or structure, they assured the public and employees no layoffs would occur as Canada Cartage will absorb the current staff.
Hutcheson also indicated this outsourcing could be beneficial, as handling everything internally isn’t always the most efficient strategy. She explained, "Sometimes it’s smarter to outsource than try and do everything internally."
Walmart Canada’s spokeswoman, Sarah Kennedy, echoed this sentiment, detailing the efficiencies third-party carriers already bring, noting, "Third-party carriers manage about half of our transactions related to fleet services."
This expansive growth plan from Walmart Canada is not only limited to new locations and logistics improvements; the company also announced plans to invest nearly $200 million toward wage increases for frontline employees beginning this year. This move is aimed at improving employee livelihoods and attracting new talent within the retail sector.
The comprehensive strategy reflects Walmart's approach to redefining retail experiences, engaging with Canadian communities, and enhancing their overall business model as they aim to differentiate themselves from competitors.
This vast investment and operational shift reflects Walmart's strategic investment mentality and commitment to long-term growth in Canada, with expectations to yield significant returns as consumer behavior continues to evolve.