Metro Police Officers Are Shown Outside Walmart
Metro Police officers are shown outside a Walmart after a shooting in Las Vegas June 8, 2014. Las Vegas police said on Sunday that a shooting incident involving officers resulted in injuries and urged people to stay away from the scene. The Las Vegas Metropolitan Police Department said in a tweet that the incident occurred near north Las Vegas, at an address close to a Wal-Mart store. Reuters/Las Vegas Sun//Steve M

The Walmart Canada's competition with other grocery retail players entered a new phase after it laid off 200 employees in the name of a restructuring exercise. The reason cited was poor customer traffic. Walmart Canada was being seen as a victim of deepening retail war in the Canadian market.

Of late, Walmart Canada has been concerned with the decline in traffic despite overall improvement in sales driven by food purchases. The company expressed the hope that the changes will create a more efficient organisational structure to "position the company competitively for a bright future," according to Andrew Pelletier, Walmart Canada's vice-president for corporate affairs, reported Global News.

Grocery War

Walmart Canada made many strategic changes and added a number of new locations and converted 30 of them into "Supercentres." It then deployed additional staff to operate food aisles and inventory. But the pressure from food retailers such as Loblaw, Metro and Target Corp continued to scale up the competition.

All these big players are jostling for a big slice in the weekly grocery budget. Walmart Canada, on its part, stood ahead in pouring big money by expanding the chain for selling more food products. Walmart's top management recently announced its aim to be the "lowest cost player in any country it operates," including Canada.

David Cheesewright, the chief executive of Walmart's international division, said, "we want to save people's money." Shelley Broader, the former head of Walmart Canada, admitted that the entry of the U.S.-based rival Target into Canada has put Walmart Canada into a "hyper competitive phase."

Costco Surprise

Despite costly expansion by Walmart Canada to tackle retail grocery competition and grab more share in the market, a very strong rival in Costco continued giving it a run for its money. This U.S.-based warehouse retailer has been operating without any fanfare in 88 locations in Canada, as the fastest-growing food seller. It has already outpaced many traditional grocers and smart players, including Walmart Canada, claimed experts.

"Despite Walmart's traction in market share through its Supercentre rollout, Costco's share gains have been even more pronounced," said analysts Raymond James in a recent research note. Costco's market share, as a percentage of the sales it collects in the overall Canadian grocery purchases, surged 53 percent in recent years, according to James. This contrasts with the 35 percent share of Walmart clocked throughout in 2013, added Global News in another report.

Washington-based Costco has 10 million members in Canada, who collectively spend $8.9 billion on food at its stores. It is double the amount of $4.5 billion spent at Walmart Canada's locations. Costco's membership-based, no-frills approach relies on on a smaller number of products and the skill of selling them in high volumes. This volume game has allowed Costco to buy bigger volumes for less and then passing on those savings to customers, in a strategy described by one analyst as, "stack it high and watch it fly."