Friday 27 January 2023

Walmart evaluates sale of businesses in El Salvador, Honduras and Nicaragua

Multinational will focus its resources and investments in Costa Rica, Guatemala and Mexico, reported in a relevant fact sent to the Mexican Stock Exchange

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27 January 2023 - At The Banks - BCCR

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Q24N – Walmart de México y Centroamérica (Walmex) announced, this Monday, January 24, that it is seeking strategic alternatives for its operations in El Salvador, Honduras and Nicaragua, among which it is evaluating the sale or strategic alliances.

Walmart explained that it will focus both its resources and investments in Costa Rica, Guatemala and Mexico.

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“As we seek to prioritize our resources and accelerate our ecosystem in Costa Rica, Guatemala, and Mexico, we believe there may be attractive opportunities for further growth in El Salvador, Honduras, and Nicaragua, which could be better captured under a different structure,” said Guilherme Loureiro, executive president and general director of Walmex, in a relevant fact published in the Mexican Stock Exchange.

The Walmex Board of Directors made the decision to focus its “efforts and capital on its main businesses and geographies”, while the course of business in El Salvador, Honduras and Nicaragua is defined, the operation in these countries will continue normally, without affecting the obligations with clients, associates, suppliers, it was detailed in the statement.

“The company does not guarantee that the process will result in a transaction. Walmex will inform its shareholders and the investing public in general in accordance with the provisions of the applicable laws and regulations,” it was detailed in the statement released on the Mexican stock exchange.

Aquileo Sánchez, director of Corporate Affairs Walmex said the statement does not imply that it will stop serving the five markets or the discontinuity of formats in each country. The spokesperson stressed that all Central American operations are solid businesses.

“It is important to note that while we carry out this strategic review for Honduras, El Salvador and Nicaragua, we maintain our position in Guatemala and Costa Rica and believe that there are additional opportunities for growth. There are no plans to carry out a similar review in markets other than Honduras, El Salvador, and Nicaragua,” Sánchez stressed.

In the Central American region, Walmart Costa Rica and Guatemala represent almost 70% of the firm’s annual net sales between 2017 and 2020, according to the firm’s financial statements.

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In 2020, the multinational reported sales of $6.146 billion, of which 42%, that is, $2.694 billion, were in Costa Rica; and 26% in Guatemala, which amounted to $1.597 billion. The remaining $1.855 billion were distributed among El Salvador, Honduras and Nicaragua.

For its part, sales in Mexico amounted to $27.7 billion, according to the 2020 audited financial statements.

As of September 2021, Walmart operated 3,566 supermarkets in Mexico and Central America. Of the total, 2,705 are in Mexico and 861 in the five Central American countries in which it employs 37,708 people, according to financial information published by the company.

In Costa Rica, the firm operates the Walmart, Masxmenos, MaxiPali and Pali brands. As of last November, it had 283 stores, that is, 33% of Central American supermarkets.

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Q24N is an aggregator of news for Latin America. Reports from Mexico to the tip of Chile and Caribbean are sourced for our readers to find all their Latin America news in one place.

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