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Wal-Mart of Mexico Investing $18.97 Billion MXN in 2011

13 September, 2012

Company CEO Scot Rank said last Thursday that Wal-Mart de Mexico SAB (WMMVY,WALMEX.MX) is planning to open a new fleet of stores in 2011. “Walmex” will aim to sustain faster sales growth in the years to come,he says. Walmex plans to invest 18.97 billion pesos this year,which equates to around $1.56 billion US,which will go towards operations in Mexico and Central America.

According to Fox Business News,Rank announced in an Internet broadcast to analysts recently that 11.84 billion MXN will go towards opening new store locations,4.18 billion towards logistics,systems,and fixed assets,and 2.95 billion will go toward remodeling existing store locations. This is a jump from the 13.13 billion MXN that Walmex was investing in Mexico in 2010.

Walmex opened 267 stores in Mexico last year,and plans to open 365 stores in the region throughout 2011. The combined openings in Mexico and Central America will increase existing sales floor space by approximately 11.9 percent.

The expansion is expected to allow Walmex to see annual growth rates between 14 and 15 percent in total sales in 2012. In addition,company officials expect to see the growth rate increase from the past years’ average of 10 percent,which does not include the current expansions.

The young populations of Mexico,Guatemala,Honduras,El Salvador,Nicaragua,and Costa Rica all show a promising number of future potential customers. As a result,Walmex says it could add 3000 cities to its current operations,which currently encompasses 388 cities. Until now,Walmex’s participation in general merchandise and supermarket sales in Central America has been very low,leaving plenty of room for improvement in the coming year.

Walmex also reported fourth-quarter earnings for 2010 this week,and saw a 24 percent increase in total revenue to MXN 335.86 billion. Net profit increased 16 percent to MXN 19.55 billion,and gross earnings rose 24 percent to MXN 33.29 billion.

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