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Wal-Mart: up and down

Thursday, March 6, 2014

An efficient stocking systems and the introduction of new products, led to strong 2013 results for Wal-Mart in Central America.

The company’s Mexican operations by contrast were weak.

Net income from Central American operations grew 7.2 percent in the last quarter of 2013, following an increase of 6.4 percent in the previous quarter.

During 2013, the company opened 21 stores in the region.

Wal-Mart’s success in Central America is due in part to the implementation of efficient stocking systems and the introduction of new products to the region, along with competitive prices, the company said.

Wal-Mart in January opened five new outlets in Guatemala, Honduras, Nicaragua and Costa Rica.

In Mexico, the company plans to step up competition against the informal retail sector, which accounts for nearly half of the country’s retail sales, and to expand its e-commerce business.

A combination of quality and price, especially for fresh products, will seek to attract consumers, who currently use the informal sector.

At the same time, Wal-Mart plans to increase the range of products, which it offers to Mexican on-line customers, whose numbers have grown in recent years.

In addition, the company this year plans to expand capacity by remodeling existing stores, as opposed to opening new locations.

Tax measures approved last year hit consumer confidence in the country.

In Wal-Mart’s case, this led to flat results for the first two months of this year, following a 13 percent drop in 2013 fourth-quarter sales, compared to the same period in the previous year - the biggest decline in quarterly profit since 1999.

Last year, the company opened 230 stores in Mexico.

The company operates 2,868 stores in Mexico and the Isthmus.

Wal-Mart de Mexico y Central America (Spanish only), with headquarters in Mexico City, is a subsidiary of Arkansas-based Wal-Mart Stores, Incorporated, which owns 60% of the stock.