Walmart’s standalone Neighbourhood Markets could be introduced to Canada’s heated grocery battle, says a recent retail analyst conducted by Desjardins.
“We speculate Walmart Canada may test this concept in Canada within the next three years,” writes Keith Howlett, a Desjardins analyst, in a client note.
The stores have been successful in the U.S. market, seeing growth over 20 straight quarters. Walmart has seen a seven per cent increase in same-store sales in the most recent quarter.
The Neighbourhood Market stores are about a fifth of the size of the retailer’s supercentres and offer a full selection of grocery and pharmacy items at discount pricing.
This will be a new direction for the retailer, as they change strategies with their Walmart Express locations.
In Canada, grocers “continue to grapple with the growth of Walmart Canada in discount groceries, and the increasing appeal of Canada’s narrow selection of grocery product items to middle- and higher-income households,” Howlett writes.
Walmart has increased its market share in Canada. Same-store sales have grown by 4.6 per cent in the recent quarter, compared to 2.6 per cent at Loblaws, 2.7 per cent at Sobeys, and five per cent at Metro.
