Walmart mounted its biggest expansion in Mexico since 2013 last year, opening 134 new stores and boosting its presence in its largest foreign market by nearly 5%.

With 3,407 stores in the country, Walmart has more locations in Mexico than in any other country outside the United States.

Most of the stores are the Aurrera Bodega chain of supermarkets, including the smaller Bodega Express, no-frills units that are cheaper and faster to build than the brand’s larger formats.

The Bodega brand adheres to Walmart’s strategy of “Everyday Low Prices” and aims to compete with informal marketplaces and attract low-income shoppers.

Banorte equity analyst Valentin Mendoza said that informal markets are “where you find the great population mass that Walmart is going after.”

Analysts foresee Walmart maintaining its growth pace and generating more sales in new stores, but Mendoza said that such expansion could backfire on Mexico’s biggest retailer.

“Where is the ideal point where you can keep growing without cannibalizing the sales you already have?” he said.

Walmart saw record growth in Mexico in 2011 when it opened 365 stores.

But the following year it was hit with allegations of bribery and new growth slowed as a result.

The number of last year’s openings was the highest since 2013, when the company opened 214 stores in Mexico.

Walmart opened only 27 stores in all of Central America due to the region’s weak economy.

Walmart stores in Mexico open for more than a year saw sales rise 2.6% in December compared with that same month in 2018. The company’s total sales nationwide rose 4.1%.

Source: CNBC News (en)