Retailer Walmex eyes more Mexico stores after fastest expansion in decade

MEXICO CITY (Reuters) -The chief executive of Mexican retailer Walmex on Thursday said the company could continue to grow its footprint in Latin America's No. 2 economy, after 2023 marked its fastest year for adding new stores in a decade.

The Walmart unit said in a call to discuss results that it had opened 162 new stores across Mexico and Central America last year - the most stores added in a single year in a decade - including 101 in the last three months of 2023.

"The opportunity to grow our stores in Mexico remains very present," said Chief Executive Guilherme Loureiro.

Through 2024, the company said it also would focus on improving public perception of its prices and addressing other issues.

Loureiro said that while the company's hypermarkets were doing well and should continue to improve this year, its smaller Walmart Express stores had suffered from "a sequence of bad decisions.

"We could write a book about everything to do wrong," Loureiro said. Among the missteps, he pointed to struggles in positioning the brand between premium and low-cost rivals and said the company had been slow to address customer complaints.

"It's important to expand but also to maintain our fleet in good shape," the CEO said.

"Now we have an opportunity and the actions we take should be accretive to our results this year," he said.

The call came a day after Walmex posted a fourth-quarter profit that edged up just over 1%, as it grew market share in the fruit and vegetables sector but was hit by rehabilitation costs after the deadly Hurricane Otis, which struck Mexican resort town Acapulco, and political protests in Guatemala.

Analysts at Itau BBA said results were in line with their expectations though it was impressed by improved transparency on the group's "ecosystem," including online revenue, pharmacy, telecoms service Bait and its advertising arm, Walmart Connect.

"Mexican consumers continue to favor value-focused banners due the high food inflation," the analysts said. Mexican inflation ticked up early this year, pushed up by climate impacts on fruit and vegetables.

Walmex also logged a slowdown in sales of its non-consumable merchandise, which includes clothes and electronics, as more buyers turned from brick-and-mortar stores to online options.

(Reporting by Sarah Morland and Aida Pelaez-Fernandez; Editing by Kylie Madry and Bill Berkrot)

By Sarah Morland and Aida Pelaez-Fernandez