Walmart beats Target to the punch in Canada

Leading a walkabout of the new Walmart in Newmarket on Thursday, Chief Operations Officer Jim Thompson stopped to grab a pair of $5 jeans for boys and a $4 graphic t-shirt.

He shook them in front of the cameras.

“This is unheard-of value in the Canadian marketplace. You can send a child to school for $9 by shopping at Walmart,” he said, and shook the jeans again.

Take that, Target.

The Walmart store in Newmarket opening Friday was one of the 39 Zellers leaseholds Walmart bought from Target. The 39 locations were among 220 Zellers leaseholds Target had originally purchased from HBC last year.

Walmart will not disclose what it paid for the leases.

Target will open its first stores in Canada in the spring of 2013, after extensive remodeling of the former Zellers locations.

Walmart turned around the Newmarket location at the 404 Town Centre in 65 days.

“There is no one else in the Canadian market that can open a store in 65 days,” said Thompson.

The store was closed on June 20, and although there have been many improvements, including new and bigger bathrooms Thompson said customers asked for, the store still has a familiar discount-department store look and feel.

Walmart will open all 39 former Zellers locations before the end of this year. The discount retailer is planning to complete 73 new projects — renovations and new stores — by January 31, 2013, adding 4.6-million square feet of retail space to operations in Canada.

Retail analyst Alex Arifuzzaman, a partner at Interstratics Consultants Inc., says there’s another reason Walmart is in a hurry.

“They have lease payments and cost overhead for the locations so the sooner they open them, the sooner they get income.

“They can get back-to-school by opening this week in Newmarket.”

A Walmart Supercentre is typically 140,000 square feet. The Newmarket location is 69,000 square feet, which means some sections are compressed — the jewellery counters are stacked on top of one another instead of spread out.

There was no skimping on shelf space for diapers (72 Pampers Baby Dry for $15.97), shoes ($15 for pink sequined ankle boots, $10 for imitation ankle Uggs) or popular cleaning supplies (Windex at $3.57 for a 765 ml trigger bottle or $2 for a 946 ml bottle of the Walmart brand).

The front of the store is packed with back-to-school supplies, including plain school binders for 83 cents and packages of 150 sheets of paper for 17 cents. Twin comforters for a college dorm room bed sell for $15.

“We’ve been working a year for this back-to-school and we’re ready,” said Thompson.

A disadvantage to opening so early is that it will give Target added impact when it opens its new stores, said Arifuzzaman. A new Target will open at the Upper Canada Mall in the spring of 2013. The Zellers there is liquidating and will close in September.

“I think it will be great for consumers. As the retailers battle it out, one way to bring consumers in is to work on pricing,” said Arifuzzaman.

“For the retailers on the other hand, it’s really going to impact their potential margins. They are going to give up margins to keep the customers.

“I think there could be some increase in spending, but a lot of it is going to be redistribution of sales from existing retailers.”

There are 337 Walmart stores in Canada, including 156 discount stores and 181 supercentre stores with fresh groceries

The Newmarket East Walmart will employ 69 associates. Walmart received 1,800 applications for hourly positions at the store.