Walmart's smaller format sales up 12% in Mexico

In Mexico, Walmart (NYSE:WMT) sales have been dropping significantly in the past few years due to competition from traditional markets, small stores and street vendors. The big box retailer hopes to rejuvenate sales in Mexico, as it accounts for 20 percent of all international sales.

Densely populated towns leave little room in Mexico for giant supermarkets and big box stores, reported the Sourcing Journal. Therefore, the company is pushing its mini-grocer format, Bodega Aurrera Express, which first launched in 2008.

The format looks like a slightly larger mom-and-pop shop and sports the Bodega Aurrera mascot, Mama Lucha, who fights for the best prices.

Though sales were slow at the start, the past year saw a 12 percent growth in Bodega Aurrera stores—same-store sales in traditional Walmart stores have not increased at all in Mexico.

The express store aims to capture the low-income population, since 80 percent of consumers in Latin America fall somewhere between middle class and poverty.

The average Bodega Aurrera Express is about 2,690 sq. ft., 3 percent of the size of a Walmart Supercenter.

Even in the United States, Walmart's smaller format stores, Neighborhood Markets, posted a 5.5 percent sales increase in the quarter ending in October, versus a 0.5 percent rise in traditional stores' same-store sales for the same period.

Due to its success, the retailer is renaming existing Walmart Express stores as Neighborhood Markets to consolidate the small formats under a single banner. Walmart announced in February of last year that it would rev up expansion of all small-format stores. The retailer planned to build 270 to 300 small stores in 12 months, doubling its initial prediction of 120 to 150. This includes the growth of the Neighborhood Market, Express and Walmart To Go brands.

For more:
-See this Sourcing Journal article

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