Change and innovation has been Walmart de México’s trademark since 1958 when it opened its first discount store, then known as Aurrera. It was the first company to introduce the concept of one-stop shopping, barcode scanning, low prices and many other innovations in Mexico.

Today, the company has operations in six countries, with four different retail formats, membership warehouse clubs, an apparel chain, a restaurant chain, a commercial bank, an agribusiness operation, an efficient logistic network and annual sales above $25bn.

More than 200,000 associates work in 2,000 stores and units throughout Costa Rica, El Salvador, Guatemala, Honduras, Mexico and Nicaragua.

Three tier growth
Walmart de México’s remarkable growth stems from its strict commitment to three strategic pillars: continuous profitable growth, talent development and engagement, and corporate social responsibility.

While growth has been constant since 1958, the last five years have been remarkable: the number of units in Mexico went from 694 in 2004 to more than 1472 in 2009. With units in all 31 states of Mexico, in addition to Mexico City, it has established a presence in over 265 cities and towns.

More importantly, Walmart de México has developed a successful multiple format structure of discount stores, supermarkets, hypermarkets, warehouses and membership clubs. In addition, its Suburbia apparel stores, Vips restaurant chain and Walmart Bank – present only in Mexico – address new population targets and provide a wide array of services to its customers, enhancing the overall experience and increasing the acceptance of the company.

During 2009 Walmart de México served 1,219 million Mexican customers, 13.8 percent more than during 2008. Customer count in comparable stores increased 3.3 percent, meaning that every Mexican visits its units at least ten times a year.

Talent development is a significant element of Walmart de México’s value proposition. Growth is linked to its ability to find talent that excels in customer service. With 175,000 associates in México, the company is the largest private-sector employer in the country and allocates millions of hours a year to training.

Social responsibility is a comprehensive part of Walmart de Mexico’s business. Families that have the most need to save – primarily in rural areas – end up paying the highest prices. Consequently, Walmart de México considers its activities of providing goods and services at low prices not just a business strategy, but also part of its corporate social responsibility to these same families. Moreover, the Walmart de México Foundation supports assistance programmes for communities with severe nutrition needs, either through food banks, self-help agricultural and manufacturing projects, or volunteer work. Over 3.4 million Mexicans and more than 200 NGOs benefit from this support. 

Walmart de México has also placed special interest in sustainable projects to eliminate wastes, reduce water and energy consumption, and integrate more environmentally-friendly products to its catalogue. Some 390 water treatment plants have allowed for the saving of more than 300 million litres of water in a single year. It has stores using solar energy produced by placing cells on the roof tops, and in 2010 over 300 units will operate with wind energy from a facility located in southern Mexico.

Innovation
After opening its first store, the company sought to continuously grow with new markets and services. Its Vips restaurant chain and Superama Supermarket date back to the 60s, the Suburbia apparel stores and Bodega Aurrerá austere discount store to the 70s, and the 90s included the launch of Walmart hypermarkets and Sam’s Clubs throughout the Mexican market.

More recently, Bodega Aurrera has developed new business concepts for mid-size cities through smaller-sized Mi Bodega Aurrera units and for heavily populated urban areas with the much smaller but rapidly growing Bodega Aurrera Express convenience stores.

Walmart de México became the first Walmart business in the world to offer banking services, via Banco Walmart. The bank provides services through more than 200 branches located in stores and Clubs, and 20,000 POS in all its businesses throughout the country, by means of the recently enacted banking correspondent legislation in Mexico.

This infrastructure turns the bank into one of Mexico’s most widely available financial institutions, offering services to Mexico’s largely unbanked population.

It is this drive to move into new markets and cities, adapt its formats to new customer needs, and develop new venues of business that have characterised Walmart de México’s continuous growth.
 
Central America
In November 2009, Walmart de México integrated Walmart’s operations in Central America to its business, creating new growth opportunities for its shareholders. This is a historical transaction for Walmart de México, not only because it will become an international retailer with operations beyond Mexico, but more importantly because it is the first time that Walmart Stores Inc, entrusts a subsidiary with the responsibility of running the operation of the business in another region. This strategic alliance will allow the company to focus on addressing the needs of 138 million people with demographic similarities – a largely young and dynamic population – many of whom still lack access to modern retail services at low prices.

By integrating Central America, Walmart de México increased its installed capacity by 19 percent, sales by 17 percent, EBITDA by 11.6 percent, and net income by 7.6 percent (as of September 2009).

Walmart Central America has 519 discount stores, supermarkets, warehouse stores, hypermarkets and membership clubs targeting specific consumer groups.

With a structure similar to that of Mexico, there are opportunities for synergies regarding the operations and growth of the company’s presence in the region. There are 310 cities and towns from Mexico to Costa Rica where Walmart currently has no presence. The market size amounts to $241bn dollars and an estimated 33 million new consumers will be added during the next 15 years.

Financial conservatism
Just as Walmart de México has been successful in its commercial value proposition, it has been relentless in pursuing a conservative financial policy.

From the beginning, Walmart de México has had a sound financial position, a matter of special relevance when considering credit and liquidity restrictions that have often prevailed in the Mexican market. The company has no debt and, in accordance with its corporate governance standards, it does not deal in derivatives. Its cash represents more than 10 percent of its assets and is wisely and carefully invested following highly conservative standards, always based on the security, liquidity, and yield criteria established by the Finance Committee.

Its board of directors oversees the management of the business, with all members appointed on a yearly basis by the shareholders at the annual meeting. The board appoints and works actively with the CEO to develop general corporate strategies for the company. It also approves all information policies and communication with shareholders. Independent directors must comprise a minimum of 25 percent of the total number of board directors.

The board of directors, with the support of the Executive, Audit and Corporate Practices Committees, periodically reviews company results and keeps a close watch on control mechanisms and sound practices, including the proper use of assets, thus further strengthening the confidence of its shareholders.

Walmart de México operates with the highest quality standards and is seeking  to become more competitive through innovation and process improvements. Walmart de México’s financial and administrative processes obtained ISO 9001:2000 certification from the British Standards Institution (BSI). Its policies of transparency and operating efficiency have a positive effect on its relationships with customers, suppliers, shareholders and government agencies.

A new beginning
As 2010 marks a new beginning in Walmart de México’s history – now an international company – it maintains the same vision: to contribute towards improving the quality of life of its customers’ families. As its operations have transformed over time, its foundations of retail innovation, solid finances and commitment to help people save money and live better, remain unchanged.