Walmart Optimizes Suppliers in Mexico
MEXICO CITY, MEXICO - While transportation and e-commerce are eating up costs for stateside retailers, the market in Mexico is clear of such margin-squeezing expenses. As a result, one of Mexico’s largest retailers has solidified its lead in the growing market. Walmart de Mexico (Walmex) beat the street in its fourth quarter earnings thanks to efficiencies, cost reductions, and an improved supplier strategy, according to Reuters.
“Our buyers are doing great work and are negotiating in a more efficient way with our suppliers, which has allowed us to keep our leader position in price and improve profitability,” Walmex said in statement.
Walmex reported an 11 percent increase in net profits, a 22.5 percent growth in gross margins, a net profit of 11.8 billion pesos ($598 million), and revenue of 177.4 billion pesos ($9.188 billion) for its fourth quarter. Reuters reports that analysts only expected Walmex’s net profit to rise by 1.9 percent.
The retailer’s latest growth is partly due to 134 new stores Walmex opened in 2018, which Reuters noted was the most stores the retailer has opened in five years, contributing a 2.3 percent increase in total sales growth. In addition, Walmex has placed a greater emphasis on its e-commerce business, with Chief Executive Guilherme Loureiro calling e-commerce one of the retailer’s “biggest assets” that it will be leveraging to continue to buoy its brick-and-mortar stores.
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