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Small formats in future for Walmart Canada

Former Delhaize CEO Dirk Van den Berghe was named president and CEO of Walmart Canada as the retailer eyes long-term growth opportunities including the development of small stores.

Walmart Canada hasn’t formally announced plans to open small format stores, but the choice of Van den Berghe to fill the position recently vacated by Shelley Broader is the latest evidence that small format stores are in the works. Van den Berghe spent the past 12 years with Belgium-based Delhaize and most recently served for three years as the company’s CEO for Belgium and Luxemburg operations. In that capacity, he oversaw the development and growth of Delhaize’s traditional supermarkets as well as small formats operating under the Proxy and Shop & Go banners.

In his new role at Walmart Canada, Van den Berghe will report to Broader who was elevated to the role of president and CEO of Wamart EMEA within the retailer’s international division. He joins the retailer’s Canadian operation as it prepares for it next leg of growth as a robust supercenter expansion strategy driven by the conversion and relocation of existing discount stores runs out of steam.

This year, will see the retailer open 35 supercenters, giving it a projected year end total of 395 stores, of which 282 will be supercenters and 113 will be discount stores. Just 18 months ago, Walmart Canada had 379 stores, of which only 209 were supercenters and 170 were discount stores.

With the number of discount stores suitable for conversion dwindling, Walmart is again poised to follow the pattern of growth unfolding in the U.S. where the emphasis increasingly has shifted to smaller stores operating under the banners of Neighborhood Market, Walmart Express and Walmart To Go.

The hiring of Van den Berghe supports the thesis that Canada soon will see the development of alternative formats. During his tenure a CEO of Delhaize Belgium and Luxembourg, he oversaw an operation consisting of 852 stores that generated annual sales of more than $6.7 billion, roughly one fourth the company’s 2013 total global sales of $28 billion. However, none of those stores looked anything like the units Walmart operates in Canada which are massive by comparison. Even the company’s traditional Delhaize supermarkets average only about 20,000-sq.-ft., roughly half the size of a typical Walmart Neighborhood Market which is regarded as a small format in the U.S. The Proxy and Shop & go stores Delhaize operates in Belgium and Luxembourg average about 5,000-sq.-ft. and 1,500-sq.-ft., respectively.

Store sizes in general tend to be smaller in Europe due to population densities and the regulatory climate. This was especially true for Van den Berghe in Belgium and Luxembourg, a geographic region about half the size of West Virginia with a population about one third that of Canada’s roughly 35 million people.

“Under Dirk’s leadership, Delhaize has been successful in several countries, and his vast experience will allow us to strengthen our growing food business in Canada and complements our highly-successful general merchandise operation,” Broader said. “One of Walmart’s greatest strengths is having exceptional leaders to drive our continued growth, and Dirk is a prime example of this talent.”

In addition to his retail background, Van den Berghe brings some non-traditional skills to Walmart Canada. He spent a decade with the Belgium government as an international trade commissioner and also has two decades of experience teaching international business at universities across Europe, Asia and the United States. He earned a Ph.D in economics from Sofia University in Bulgaria and speaks seven languages including English, French and Dutch.