Walmart abruptly pulled out of a $100 million fulfillment center that was scheduled to open in early 2024.
Walmart’s fulfillment center was scheduled to take over a huge building in the Montreal-area municipality of Vaudreuil-Dorion, Canada.
However, Walmart plans to refocus its funds.
Walmart Canada spokeswoman Sarah Kennedy announced in an emailed statement that the company is abandoning the project, the Montreal Gazette reported Thursday.
Kennedy said Walmart will focus its focus and resources on accelerating store upgrades rather than pursuing fulfillment centers.
She did not say what prompted the company to cancel the project.
Kennedy said Walmart plans to upgrade eight stores in Quebec in 2024.
The retail giant also spent $120 million on store renovations in the state in 2022 and 2023.
Walmart is working to compete with Amazon with high-tech fulfillment centers like the one planned for the Montreal area.
A fulfillment center is a place where more online products and their shipping processes are handled.
Juan Camilo Serpa, an associate professor at McGill University who specializes in business analysis, told Canada’s CBC that Walmart is moving forward with further e-commerce efforts in 2023.
Currently, the company’s online business accounts for 15% of its total sales, Serpa added.
Serpa added that the closure may be due to a strike by Quebec workers.
“There are worker strikes everywhere, and businesses are scared, even in the public sector,” he said.
“Supply chains are very sensitive, especially to the political turmoil of the last few years.”
Luc Boyer, director of economic development and industry commissioner for the Vaudreuil-Solanges Development Authority, said it was unfortunate that Wal-Mart had abandoned the project.
However, he has high hopes that the center will take on new projects soon because of its location.
“It’s always disappointing when a big company like Walmart decides to start a project in this area and then changes their mind,” Boyer said, according to CBC.
“On the other hand, this location is in a prime location and we are confident it will not remain vacant for long.”