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MEXICO CITY (Reuters) - Walmart de Mexico (WALMEX.MX), Mexico’s biggest retailer, reported on Thursday its slowest revenue growth in three quarters, with its core supermarket chain hit by competition after the government altered a welfare spending programme.
Walmex, as the unit of Walmart Inc (WMT.N) is known locally, said revenue rose 4.7% in the fourth quarter of 2019, it slowest since the 4.6% clocked in the year’s first quarter.
Walmex’s Bodega family of warehouse-style supermarkets comprise nearly 80% of the retailer’s stores in Mexico, the largest foreign market by store count for Walmart Inc.
Supermarket vouchers given out by the leftist government of President Andres Manuel Lopez Obrador were previously designed to be spent at chains such as Bodega. But ahead of the fourth quarter, the government allowed the vouchers to be converted into cash, opening up possibilities for them to be spent at corner stores, street vendors and outdoor marketplaces.
“Among our formats, Bodega suffered the greatest impact from the change in disbursement of government support programs, especially in the center and metro regions,” said Guilherme Loureiro, Walmex’s chief executive, on a webcast following the release of the quarterly earnings.
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Walmart's Mexico unit faces their lowest quarter ever, company blames updates on the government's welfare spending… https://t.co/agxu7hipLo
Walmart's Mexico unit blames government cash aid, as revenue rise slowest in three quarters $WMT https://t.co/peDXEOdqa2
UPDATE 2-Walmart's Mexico unit blames govt cash aid, as revenue rise slowest in 3 quarters $WMT https://t.co/H2ZF14sQBR
Walmart's Mexico unit blames government cash aid, as revenue rise slowest in 3 quarters $WMT https://t.co/xA6IslaGJE
Walmart's Mexico unit blames government cash aid, as revenue rise slowest in three quarters - Reuters #iprindia… https://t.co/5SdGrKyVYa