Walmart Sales Slow DownBy Sofía Hanna | Wed, 10/28/2020 - 16:51
Walmart Mexico and Central America reported lower growth in sales and a net profit loss of 0.9 percent. The company’s 6.8 percent growth in sales has been its lowest in 2020. A deceleration in monthly sales was also recorded, according to El Financiero. This is due to a phenomenon called the calendar effect. Marisol Huerta, Analyst at BX+, stated that this affected September's sales against August as the former month only has 30 days.
According to Forbes, 3Q20 would be the lowest increase in sales Walmart has had since 2014 when they had some market difficulties. According to Walmart, between July and September 2020, the company sold MXN$164.2 billion (US$7.9 billion) compared to 3Q19 when it reported revenue of MXN$153.7 billion (US$7.4 billion).
As the year goes by, the growth in sales reported by Walmart and other retailers has started to decrease. In the first quarter of the year, Walmart reported 12.9 percent growth, while in 2Q20 the company grew its sales by 9.3 percent. According to Forbes, sales are still strong in the northern and metropolitan regions of Mexico. However, the company is facing more difficulties in the center region.
Walmart’s official report states its stores saw a decrease in net profit of 21.9 percent between January and September 2020 against the same period last year, mostly as a result of an 81 percent fall in 2Q20 due to a payment made to SAT for MXN$8 million (US$383,300). Online sales also took a hit of 7 percent, representing 3.8 percent of the company’s total sales. However, these levels are still well above those reported before the pandemic, according to Forbes.