By Anthony Harrup
MEXICO CITY -- Mexico's largest retailer, Wal-Mart de Mexico SAB, said Thursday that its sales rose 11.9% in 2016 amid strong consumption in Mexico and relative strength in Central American currencies against the Mexican peso.
Walmex, as the unit of Arkansas-based Wal-Mart Stores Inc. is known, said sales last year totaled 528.6 billion Mexican pesos ($24.6 billion). Momentum continued into December, when sales increased 11.6% from a year before.
Walmex's sales in Mexico, where it ended the year with 2,291 stores, were up 9.1% and same-store sales 8% higher than in 2015.
In Central America, sales at the company's 731 stores rose 8.3%, and 4.9% on a comparable-store basis.
Walmex plans to report its financial results for the fourth quarter on Feb. 15.
Despite sluggish economic growth in Mexico, which is expected to have ended the year around 2.1%, private consumption fared well in 2016 as a result of employment growth coupled with low inflation and wage increases above inflation.
Retail association Antad, of which Walmex is a member, reported sales at its member chains up 9.9% in the first 11 months of the year, and same-store sales growth of 6.6%. Full-year sales of new cars and light trucks rose 19% to a record 1.6 million units, according the Mexican association of auto dealerships.
Clouds appear to be looming over consumers going into 2017, however, as higher gasoline prices and a weakening peso threaten to push inflation higher, prompting the central bank into even more interest-rate increases.
Bank of America Merrill Lynch expects inflation will accelerate to 5.3% by midyear and end the year at 5% -- outside the Bank of Mexico's 2% -- 4% target band. Consumer prices were up 3.5% as of mid-December.
Higher inflation will push up interest rates, causing credit growth to slow and curbing wage gains, eventually affecting consumption, the bank said in a report.
Write to Anthony Harrup at email@example.com
(END) Dow Jones Newswires
January 05, 2017 18:20 ET (23:20 GMT)
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