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Retail in the region: Wal-Mart

Tuesday, November 12, 2013

Wal-Mart’s results in Central America are modest, but improving.

In addition, the company’s format in the region, largely involving small stores, is becoming a model for Wal-Mart operations in Mexico.

The company’s same-store sales in Central America rose by 2 percent in the third quarter of this year, over the same period in 2012.

The increase is modest.

On the other hand, it’s an improvement over the company’s recent performance in Central America.

Meanwhile, same-store sales in Mexico fell by 1.4 percent in the last quarter, compared to a year earlier.

Most of the company’s Central American revenue comes from 580 supermarkets, which the company acquired seven years ago, as part of its expansion in the region.

The company has only 19 big-box stores in the Central American countries in which it operates - Guatemala, El Salvador, Honduras, Nicaragua, and Costa Rica.

An increased use of small formats is likely soon in Mexico, said Scott Rank, CEO of Wal-Mart Stores, Inc.

Big-box stores, which promote bulk buying, can struggle in places where many consumers don’t have cars, and where public transport is inefficient.

By comparison, the company has 549 Walmart stores in Texas, New Mexico and Arizona, whose combined population is similar to that of Central America.

Wal-Mart’s Mexican subsidiary, Walmex, controls the company’s operations in that country, as well as in Central America.