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Wal-Mart Announces $1.1 Billion Expansion in Mexico

15 April, 2014

Wal-Mart,which remains the world’s largest retailers,has announced plans to invest upwards of $1.1 billion to open new stores and other initiatives that will spur growth in Mexico. As Wal-Mart’s second largest market (trailing only the U.S.),Mexico offers the company countless opportunities for growth as the nation’s economy expands and its middle class continues to grow.

“Historically,Mexico’s retail market has remained strong as the region has sustained its economic growth and kept inflation under control”,writes Forbes. “Moreover,financing and consumer credits have played an important part in boosting retail sales.”

Known officially as “Walmex,” Wal-Mart’s Mexico division expects floor space to grow at a rate of at least five percent,with nearly $650 million allocated to opening new stores,$268 million for remodeling and maintenance,nearly $146 million for developing e-commerce and other new technology and the remaining amount on logistics.

Also of note,the Walmex board of directors has proposed paying a handsome dividend to shareholders over the coming years in a bid to protect the value of its stock in the current market. Analysts worldwide fully expect Mexico to reach or exceed its forecast growth of 3.5 percent in 2014,making this the ideal time to invest in Latin America’s second largest economy. 

“Out of its 10,0000 stores across the globe,Wal-Mart operates about 2,300 stores in Mexico,” writes Forbes. “From 2007-2012,retail sales in Mexico grew at a compound annual growth rate of 3.5 percent.”

Finally,ANTAD,which is Mexico’s largest retail trade body,has predicted that the nation’s same-store sales will increase by nearly two percent this year,while the recent ruling that excludes sales tax on essential items such as food and medicine is also expected to positively affect Mexico’s rapidly expanding retail sector.

“Food,consumables,digital and self-service sales will help drive growth at Walmex,” stated company officials at a presentation in Mexico City according to Bloomberg. “Wal-Mart is looking to Latin America to help offset declines at home.”

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