By Amy Guthrie
MEXICO CITY--The Mexican unit of Wal-Mart Stores Inc. said
Wednesday that sales at stores open for more than a year contracted
slightly in Mexico last year, in what was a tough business
environment for Latin America's largest retailer.
Wal-Mart de Mexico's total sales, including at its Central
America stores, expanded by 4.1% last year to 437.66 billion
Mexican pesos ($29.77 billion). The unit, known as Walmex, accounts
for around 6% of Wal-Mart's annual sales and is one of the
Bentonville, Ark., company's biggest overseas operations.
The retailer failed to grow same-store sales last year in
Mexico, its main market, amid sluggish consumer spending and a weak
economy. Walmex has also struggled to turn around its Sam's Club
business in the country.
The difficult operating environment contributed to a slowdown in
store openings last year, with the retailer expanding its sales
area by 3.9% versus an initial target to add 5.2% more square
footage of selling space.
Walmex has also been dogged since 2012 by allegations that the
retailer had bribed public officials to speed permits for new store
openings in Mexico. U.S. Department of Justice investigations into
those allegations continue.
Before those allegations, the company added about 10% of new
selling space a year. A strengthening of internal oversight has
resulted in slower store openings, executives say.
In October, Wal-Mart's international chief, David Cheesewright,
told investors that the company planned to retool its operations in
Mexico.
"Mexico is a really good business for us, but we want to
rejuvenate it," Mr. Cheesewright said.
The company became leaner in 2014, exiting the restaurant
business and offloading its banking efforts via asset sales.
Walmex has since overhauled its leadership, too, with Walmex
Chairman Enrique Ostalé replacing Scot Rank as CEO of the company
at the start of 2015. Mexican dairy giant Lala announced this week
that Mr. Rank will now be its CEO.
Write to Amy Guthrie at amy.guthrie@wsj.com
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