Wal-Mart de Mexico Downsizes Expansion Plans Under Watchful Eye
06/20/2012| 05:59pm US/Eastern
MEXICO CITY--Wal-Mart Stores Inc's (WMT) Mexican unit trimmed its expansion plans Wednesday as the company operates under tightened scrutiny following allegations that it bribed public officials to speed store permits in Mexico.
Wal-Mart de Mexico SAB (WALMEX.MX) now plans to open between 325 and 335 new stores and restaurants in Mexico and Central America this year and through the first quarter of 2013 for an investment of roughly 17.48 billion pesos ($1.28 billion). That growth implies an 8% increase in installed capacity in Mexico, its main market, and a 9% increase in Central America compared with 2011.
Previously, in February, Walmex had announced more aggressive plans that involved investing around MXN19.70 billion in its operations during the 2012 calendar period to open between 410 and 436 units, thereby increasing its floor space by 12% in Mexico and 9% in Central America.
The bribery allegations surfaced in April.
Walmex's toned-down expansion plans are due mainly to "additional steps the company is adding to its real estate process that extend the average time required to open a store," the retailer said in a statement. The steps include "reinforcing documentation" that supports real estate projects.
Also, the company said it has decided to move store openings scheduled for the end of December into January so as not to coincide with the Christmas holiday season, when many Mexicans take vacation.
Year-to-date the retailer has opened 87 units, 82 of which are in Mexico.
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