Wal-Mart de Mexico To Open 252 New Stores This Year

Wal-Mart’s Mexican invasion just sped up today with the company’s announcement that it will invest $805 million in the country, and open 252 new stores in 2009. The number is remarkable, given that Mexico is less significantly smaller than the U.S. where Wal-Mart is planning to open less than 150 new stores this year.

This aggressive growth also comes at a time of particular weakness for one of Wal-Mart’s main domestic Mexican competitors: the troubled Comercial, which last December was on the verge of bankruptcy. Wal-Mart has also challenged Mexico’s major commercial banks by offering its own store-brand credit card and other in-store financial services. Wal-Mart pledges to be “aggressive” in their Mexican moves, yet we’ve seen how this “aggressiveness” is connected to Wal-Mart’s poor treatment of its U.S. employees. One can only hope the Mexican government has the best interest of its people and workers at heart and makes sure Wal-Mart treats both its consumers and employees with the dignity they deserve.

Walmex to invest $805 million, open 252 stores [Business Week]

Wal-Mart de Mexico SA said Thursday it will invest 11.8 billion pesos ($805 million) and open 252 new stores in 2009 despite the slowing Mexican economy.

The investment represents a 4 percent increase compared to last year and will create 14,500 new direct jobs, said Walmex Chief Executive Officer Eduardo Solorzano.

Solorzano said the growth plan for Walmex, the Mexican unit of Arkansas-based Wal-Mart Stores Inc., is possible thanks to the company’s commercial aggressiveness and strict spending.

“We’ve always been aggressive in the commercial part and more conservative on the financial one and this is how we will continue to manage the company,” he said.

Mexico has been battered by the recession in the United States, which buys 80 percent of the goods it sells abroad. Mexico’s growth slowed to 1.5 percent in 2008 from 3.3 percent the year before, as consumer credit tightened and money sent home by migrants fell.

To combat the downturn, Walmex plans to offer low prices on some 1,700 items as a way to attract more customers, Solorzano said.

The company’s sales grew 11 percent last year to 244.9 billion pesos ($17.9 billion) and net profit rose 5 percent to 14.7 billion pesos ($1 billion).

Walmex’s shares traded on the Mexican Stock Exchange fell 0.7 percent to close at 29.30 pesos ($2 dollars) Thursday.

Walmex is Mexico’s largest retailer and private-sector employer, with more than 170,000 workers at 1,205 supermarkets, restaurants, clothing stores and retail chains.

Posted by Chris C on Friday, February 20, 2009

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