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Walmart’s 2019 Mexico Expansion Biggest In 6 Years With 134 New Stores

Walmart’s 2019 Mexico Expansion Biggest In 6 Years With 134 New Stores
The largest retailer of the world Walmart ended 2019 as the year of its largest expansion in six years in its largest foreign market outside of its home market of the United States – Mexico, as the grocer opened 134 new stores in the country which increased its presence in the country by almost 5 percent. This was announced by the retailer earlier this week.
Walmart’s Mexican unit, Walmart de Mexico , said in a monthly report that after the 2019 expansion, the company now has a total of 3,407 stores in Mexico. That number is more than what the company has in any other country outside of the United States.
The report form the company said that almost all of the new stores that were opened n Mexico during 2019 were of the Bodega Aurrera family of stores which includes the small, no-frills Bodega Express which is relatively cheaper and quicker to build compared to the bigger store formats of the company.
The company said that this expansion focused on the Bodega format of stores is part of the strategy of the company to rave up competition with informal marketplaces and attract more low-income shoppers because the Bodega format of stores offers cheaper goods in line with Walmart's "Everyday Low Prices" strategy.
"This is where you find the great population mass that Walmart is going after," said Valentin Mendoza, an equity analyst at Banorte.
Mendoza noted that Walmart can have headaches because of the expansion spree in a market where it is already the market leader even though analysts expect that the company will continue to maintain its pace of growth in the market with the company focusing on generating a higher percentage of sales from new stores.
"Where is the ideal point where you can keep growing without cannibalizing the sales you already have?" he said.
The record for opening of new stores by Walmart was hit in 2011 when the company opened 365 stores in Mexico. The very next year however there was a huge controversy surrounding the company over allegations that it paid bribes to fuel its real estate expansion. That controversy resulted in a drastic slowdown in the pace of opening of new stores in Mexico. 
2019 however marked the year when the company opened the highest number of new stores in Mexico since 2013 when it had opened 214 stores across the country. In 2019 Walmart opened 27 stores in Central America where the its business has been hit by the weak regional economy.
The company said that there was a 2.6 per cent year on year rise in December in the sales at Walmart stores open for more than a year in Mexico rose 2.6 per cent in December. The company also reported that there was a 4.1 per cent year on year rise in December in the total sales in the country.

Christopher J. Mitchell

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