Wal-Mart Invading Urban Canada. New "Wal-Mart Urban 90 Stores" to Attract Even More Buyers.

Wal-Mart (NYSE: WMT) recently announced that it is going to begin opening urban stores in Canada. The first concept store will be opened on an old Zellers property that it will be acquiring from Target. The format of the store will be named "Urban 90," and it will be located in the east-end of Toronto.

The new Wal-Mart's are intended to fill a gap that Wal-Mart experiences in Canada currently. Since the company is usually located on very large suburban lots, they have been unable to reach many dense urban buyers. They hope that the new stores will allow them to expand further into a Canadian marketplace that they have largely saturated.

The new Urban 90 format, being located in dense urban environments, is going to hit the traditional retailers and grocers the hardest. Many Giant Tiger, Loblaws (TSE: L), Metro (TSE: MRU.A), and Sobeys banners are located in urban environments that currently are free from Wal-Mart's tentacles. Soon, however, the ubiquitous yellow smiley face will shower Canada's urbanites as well. Canadian retail investors beware!

Happy Investing, and for more info:

http://www.thestar.com/business/companies/walmart/article/1014669--wal-mart-to-open-urban-store-buys-zellers-sites

Target Announces Canadian Store Locations. Kingston's Zellers to Close in 2013 & HBC to use Money to Revamp The Bay.

Target Corp. (NYSE: TGT) recently announced the list of its first 105 Canadian stores when it formally takes over for Zellers in 2013. Kingston's Cataraqui Town Centre Zellers will be involved in the first wave of store closures when it converts to the Target banner, as will 44 other Zellers locations in Ontario. The second wave of store conversions will be announced in September. 


In the next few days, Target will also pay HBC owner Richard Baker half of the $1.82 Billion price that is due for the 220 leases he sold to the American retailer. Money that Mr. Baker has stated will partially be used to revamp some of the corporation's struggling The Bay stores, and expand the successful Home Outfitters franchise into the United States.   


Many analysts have now begun speculating which American chain will be the next to make its Canadian foray. J.C. Penny (NYSE: JCP), Kohl's, (NYSE: KSS), and Macy's (NYSE: M) have all been mentioned, but it is doubtful any of them will make as large a splash as Target intends. Zellers was long viewed, and widely known, as a takeover candidate, but other Canadian chains are less obvious. 


As many investors know, the Canadian retail landscape is largely dominated by foreign enterprises and multinationals, but there are still a few companies, like Loblaw (TSE: L), Metro (TSE: MRU.A), etc. who own large amounts of valuable real-estate that could be sold to a hungry international retailing firm like Tesco from the UK. To be sure, Intelligent Investors must be mindful of the underlying value that some traditional Canadian firm's like Loblaw and Metro hold under their stores.


Happy Investing : )

Zellers Sold to Target for $1.8 Billion: The U.S. solidifies its strangle-hold on retail in Canada.

The Hudson's Bay Company has recently sold Zellers to U.S. retailer Target (NYSE:TGT) for $1.8 Billion. Target plans to convert about 150 stores and sell the remaining 70 Zellers locations to another buyer.

Considering that the Zellers chain was on it's last breath following HBC's sale to U.S.-owned NRDC Equity Partners in 2008, the news is not surprising. Rumours have been circling about a sale of the chain to Target for years now, and steep competition from Wal-Mart (NYSE:WMT) left the chain struggling to find customers.

Though the retail market in Canada is thriving, the recent sale of the chain reminds us of the terrible truth that American corporations have a strangle-hold on the Canadian marketplace. Wal-Mart, Costco (NASDAQ:COST), Best-Buy (NYSE:BBY), and a slieu of other global behemoths have largely gobbled up their Canadian competitors. With the exception of Canadian Tire (TSE:CTC.A), Loblaws (TSE:L), and a few others, there are very few Canadian owned retail locations.

Sadly, expansion southwards has not gone as well for Canadian companies. Only Tim Horton's (TSE:THI) and Couche-Tard (TSE-ATD.B) have really been able to crack the U.S. market. There are a number of reasons for this, but much of it is attributable to lacking economies of scale for companies in Canada as compared to the U.S., where there is a ready market 10 times the size as in Canada. U.S. retailers can utilize their large networks at home to leverage their expansion north, whereas Canadian retailers have to leverage a much smaller network to expand into the highly competitive American market.

Interestingly, both Tim's and Couche-Tard are great investments for Canadians, especially considering the prospect for extensive expansion plans and continued growth. Both stocks should be on your watch-list awaiting a dip in their share prices. As for Target, the shares are reasonably priced, but in the retail sector both Wal-Mart and Costco have more potential for continued success.