by Lance Turner
Posted 2/25/2014 08:39 am
Updated 10 months ago
Wal-Mart Stores Inc. of Bentonville, looking to mitigate a streak of same-store sales declines in the U.S., is once again looking to its international unit for growth.
Bloomberg reports today that Wal-Mart has set its sights on its Mexico and Central American unit, planning to spend $1.1 billion to open stores and improve e-commerce in the region. On the drawing board are 3.7 million square feet of new space, with Mexican floor space growing by 5 percent and Central American stores expanding by 7.6 percent.
Wal-Mart, the world’s largest retailer, is looking to Latin America to help offset declines at home. Sales at Wal-Mart U.S. stores open at least 12 months, excluding fuel, fell 0.4 percent last quarter.
Wal-Mart’s Mexican business, known as Walmex, will spend 3.5 billion pesos of its expansion budget on remodeling and maintenance. It will devote 1.2 billion pesos to logistics and 1.9 billion to e-commerce and other technology.
The announcement comes just a few days after Wal-Mart reported fourth-quarter earnings showing a 21 percent decline in profit. This, in a quarter that included the all-important holiday shopping season.
Wal-Mart has increasingly relied on its international units as growth has slowed in the United States. Wal-Mart's CEO, Doug McMillon, had been the leader of the retailer's international operations until he was tapped to lead the entire company last fall.