Target's loss in Ottawa is Wal-Mart's gain: Expert
By Keaton Robbins, Ottawa Sun
First posted: Wednesday, February 11, 2015 12:17 PM EST | Updated: Wednesday, February 11, 2015 12:28 PM EST
Target's loss is Wal-Mart's gain.
Wal-Mart's announcement of a $340 million expansion plan across Canada over the next year shows the U.S.-based retailer has been "licking their chops" at recent announcements that other retail chains are scaling back or pulling out of the country.
The biggest of these is Target.
"So many people in the city were calling this (Target closing) a disaster," said Ian Lee, assistant professor in the Sprott School of Business at Carleton University. "It's not a disaster. Wal-Mart sees this as an opportunity to expand and take Target's sales."
There are currently nine Wal-Mart locations spread across the nation's capital and more could be coming.
Wal-Mart said $230 million will go towards building or upgrading 29 supercentres across Canada.
But the company won't specify how it impacts Ottawa and the surrounding region.
"We aren't announcing specific store locations today," said Andrew Pelletier, Vice-President of Corporate Affairs and Sustainability at Wal-Mart Canada. "Location and timing for specific store and distribution centre projects will be confirmed later on as projects become finalized over the coming weeks and months."
But it's not just Target's sales that Wal-Mart could be taking.
"This is just the latest example of churn in the retail industry," Lee said. "Jobs in the city will be quickly reabsorbed by Wal-Mart and other competitors."
Wal-Mart says the expansion is expected to create approximately 3,700 construction jobs, 1,000 in-store jobs and 300 distribution centre jobs across the country over the next year.
Lee said he's impressed at how fast Wal-Mart is stepping up to try and fill the void Target left in the capital.
"Wal-Mart is too smart a retailer to not exploit the market here in Ottawa," he said. "We have the highest average income in Canada and are a very affluent market that likes to spend."
And Lee also said Wal-Mart won't be the only retailer in Ottawa expanding to pick up the sales that were going to Target.
"I could see Canadian Tire and Ikea making similar moves," he said.
Twitter: @Keaton_Robbins
http://www.ottawasun.com/2015/02/11/targets-loss-in-ottawa-is-wal-marts-gain-expert