Mexican Retailers See Strong 2Q25, Caution on 2H Outlook

Mexican retailers are projected to report solid second-quarter 2025 results, driven by favorable calendar shifts and increased consumer spending following annual bonus distributions. However, analysts warn that persistent inflation and a slowing economy may dampen performance in the latter half of the year.

Retailers such as Walmart de Mexico (Walmex), Chedraui, and department store Liverpool are poised to benefit from the inclusion of Easter in the second quarter, unlike in 2024, when the holiday occurred in Q1, providing a favorable base for year-over-year comparisons.

Walmex has already reported record sales during Mexico’s Hot Sale event in late May, with strong performance in both physical stores and digital platforms. According to an LSEG poll, Walmex is forecast to post a 9% year-over-year revenue increase and a 5% rise in net profit.

Antonio Hernandez, analyst at Actinver, noted that May’s distribution of profit-sharing bonuses (PTU) gave consumers a temporary boost in purchasing power. “The timing of Hot Sale was ideal to capture that extra liquidity, especially for retailers in categories like apparel and electronics,” he said.

Still, macroeconomic headwinds are mounting. Inflation rose above the central bank’s target in May and June, while core inflation hit a 14-month high in June. Retailers are adapting by pushing private-label brands, smaller packaging, and loyalty programs to help consumers stretch their budgets.

“Private-label offerings are gaining ground, not only because they’re cheaper for consumers, but also because they offer better margins for retailers,” said Hernandez. Companies like Walmart, Chedraui, and Liverpool have expanded these product lines to appeal to a wider range of shoppers.

Looking ahead, analysts say second-quarter performance will be a test of how well retailers can weather broader challenges. The Bank of Mexico forecasts just 0.1% GDP growth for the second half of the year. Compounding the pressure, remittances—a critical source of income for millions of Mexican families—fell 4.6% in May after a record drop in April.

Retailers that cater to remittance-dependent households could be especially vulnerable, Hernandez said. “Even with the 12% increase in the minimum wage this year, retail sales have not kept pace. Political and economic uncertainty could add to the pressure.”