Walmart in Mexico targets low prices despite steep inflation, profit jumps
Reuters
Published Oct 21, 2021 04:28PM ET
Updated Oct 21, 2021 06:32PM ET
By Daina Beth Solomon
MEXICO CITY (Reuters) -Walmart's Mexico unit on Thursday said it focused on its low-price strategy as inflation rose in the third quarter, helping the retailer's net profit rise more than 20%.
Walmart (NYSE:WMT) de Mexico, the biggest retailer in Mexico, posted net profit of 11 billion pesos ($535 million) while revenue rose 6.4%, to 176 billion pesos.
"In moments of high inflation, our low price value proposition becomes even more relevant for our customers," Chief Executive Guilherme Loureiro said in a webcast to discuss third quarter results.
He added that the company, known locally as Walmex, was ready for the holiday season despite global supply chain snags, in part because about 93% of its goods are locally sourced.
"We've been working with national suppliers and logistics providers to secure capacity ... we will continue monitoring delays at ports and other factors in the supply chain," Loureiro said.
Walmex's costs in the third quarter grew 5.5% but still came in below revenue growth, while the retailer's profit margin expanded to 8.8%, the company said.
In the July-to-September period it opened 31 stores, mostly in Mexico, and a "Walmart Fulfillment Services" warehouse in Mexico City for outside merchants that sell via the Walmex website. https://www.reuters.com/business/retail-consumer/how-pandemic-helped-walmart-battle-amazon-marketplace-sellers-2021-04-14
E-commerce sales in Mexico grew 27% in the quarter, reaching 4.5% of total sales and Walmex said it would soon allow shoppers to pay for online orders using Cashi, its e-wallet.
Compared to earlier in the pandemic, when shoppers stocked up on food rather than other items, sales are again growing in the general merchandise and apparel areas, the company said.
($1 = 20.6420 at end-September)
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Written By: Reuters
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