Walmart Canada has put retailers on notice by launching a new line-up of organic products under its Great Value store brand. And in January the company announced it will close 269 stores and warehouse clubs in the US and globally, including 102 of its small-format Walmart Express locations that had been in pilot since 2011.
While the affected Walmart stores represent less than one percent of the US-based retailer’s global square footage and revenue, the news is an acknowledgment of the difficulties the retailer faces in a fast-changing, competitive retail landscape. Walmart also said the actions are part of a thorough review of its nearly 11,600 stores worldwide.
A total of 154 U.S. locations, including 23 Neighborhood Markets, seven stores in Puerto Rico, six discount centers, and four Sam’s Clubs, are slated to close while the company will focus on strengthening its Supercenters, optimizing its Neighborhood Markets, growing its e-commerce business and expanding its Pickup services.
The move by Walmart is expected to boost its fast-growing grocery business and capitalize on shifting consumer tastes to more natural products.
Walmart has undertaken this change in the US since 2014 when the world’s largest retailer began selling groceries under the Wild Oats organic brand at prices that were 25% lower than comparable products.
About a dozen Great Value Organic products can now be found on Walmart’s Canadian website, which range from cookies to pasta.
Experts suggest the move will pressure Canada’s conventional grocers such as Loblaw, Sobeys, Safeway and Metro to address their pricing in organics and boost their organics offering at their discount banners that compete directly with Walmart for supermarket customers.
And Whole Foods Market is cutting prices in order to be more competitive including against organic and natural private labels at major grocery chains and discounters. These include Kroger, Walmart, Costco and Trader Joes, while Aldi announced it will increase its private label brand in organics and expand its SimplyNature line.
Natural and organic wholesaler UNFI plans to help independents by bringing down costs, help mixed freight and add more organic private label.