Mexico’s retail market grows under Walmart influence

Led by Walmart, the Mexican retail grocery market continues to expand, according to a new report from the U.S. Department of Agriculture Foreign Agricultural Service.

Called Retail Foods Mexico 2018, the report said Walmart added 79 new outlets in 2017, opening new stores in several different formats, according to the report. Walmart also is moving into e-commerce grocery sales in Mexico.

Walmart’s main store formats include Superama (medium size supermarkets), Walmart Supercenters (hypermarkets), and Sam’s Club (warehouse clubs). As of 2017, all three business formats had internet retailing as well. Sam’s Club and Superama are known to target the high and middle-high income segments, while Walmart Supercenter targets the middle-income segment.

Bodega Aurrera, the Walmart outlet that targets lower-income consumers, has no plans to offer e-commerce sales, the report said.

NAFTA questions

The report said Mexico’s economy is still growing, though the uncertainty regarding the prolonged North American Free Trade Agreement renegotiation are likely to discourage investment from the U.S.

If NAFTA fails, any significant devaluation of the peso could also have an adverse effect on consumption levels in Mexico, according to the report. Consumers would then be more cautious when it comes to non-essential purchases, the report said.

Consumer expenditures per capita totaled $6,248 in 2017, and spending is expected to grow by 1.8% in 2018.