Wal-Mart kept its low-price strategy in Latin America.
After a bleak 2013, Wal-Mart will probably recover in Mexico. Challenges for retailers in the region.
By Santiago Gutierrez
Wal-Mart is the undisputed king of retail in Latin America. Last year the U.S.-based company sold $77 billion in this market. A distant second was French Casino with $34.1 billion regional sales, followed by Chilean Cencosud ($30.5 billion,) Brazilian CBD ($24.6 billion,) French Carrefour ($19 billion,) and Chilean Falabella ($14.5 billion).
Wal-Mart took to Latin America the same lower pricing strategy it follows in all parts of the world. However, in 2013 the “Every Day Low Price” mantra was not enough for the U.S. based retailer to maintain a brilliant P&L. This was especially true in Mexico, its largest international market, with close to 2,300 stores. Wal-Mart de Mexico increased its revenue by 2.2%, slightly more than the average revenue increase of the Top 100 retailers, but profits fell by 3.3%.
Wal-Mart’s bleak performance in Mexicowas due to the country’s economic slowdown. GDP growth fell to 1.1% in 2013, from 3.9% in 2012. Nonetheless, the company’s bet on Mexico willprobably payoff again this year, as the economy recovers to a healthier 3.0% growth.
In general 2013 was not a good year for the top retailers. Twenty of the top 50 companies reported reduction in their profits. Some increased their losses like SMU in Chile and Cencosud in Colombia.
Those who follow the Latin American non-financial companies know that domestic markets …
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