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Walmart plans heavy investment in Central America and Mexico

Walmex, Walmart's subsidiary in Mexico and Central America, plans to increase its spending by 27 percent in 2023, amounting to 27 billion pesos (about €1.42 billion). Almost half of that will be spent on renovations of existing stores, and nearly 30 percent will go towards new stores. A further 12 percent will be allocated to improving and modernising the supply chain. By comparison, last year it spent 21.3 billion pesos (about €1.116 billion) on capital expenditure due to supply chain failures.

Walmart is focusing on health in the coming years. The world's largest retailer will be expanding its plan for more advanced healthcare. It will introduce a health membership that will provide customers with unlimited 24/7 remote medical services, nutrition services, an emergency ambulance service, discounts on consultations with specialists, and discounts on medical check-ups, for a fee. The project will involve 1,500 pharmacies and 500 medical clinics across the region. In addition, Walmex has received permission from the Mexican authorities to purchase one of the electronic payment providers.

The plan will also be expanded in the U.S.

Meanwhile, the company has announced that it will open 28 new medical centres in the US next year, including the first in Missouri and Arizona. By the end of 2024, it plans to have more than 75 Walmart Health centres across the US. By the end of 2022, it operated 32 of them.

The company's sources of income will change in the coming years

According to the company's chief financial officer, John David Rainey, Walmart's profits will gradually come mainly from its online sales, delivery services and from advertising on Walmart.com, not from the sales of goods in the 10,000 stores, which currently make up the majority of the total profit. Rainey expects that contribution to change in the next five years. Spending is shifting away from goods back to services like the aforementioned health care, rent and recreation.

 

The goal is digitization

As customers increasingly rely on e-commerce, it allows Walmart to provide them with greater convenience and more distribution points. The company's retail media business, rebranded as Walmart Connect in 2021, offers brands advertising space in its U.S. stores and allows it to use shopper data to streamline advertising, even on websites and apps that Walmart doesn't own. The company's various extensions are a sign of innovation, and their reach extends into many areas. Such diversification gives the company's shares a certain stability and makes it a decidedly interesting item for investors' portfolios. As we can also see by looking at the five-year performance of the company's stock market value, it has grown by 56 percent, hovering around $139 per share over the past week. *

 

* Past performance is no guarantee of future results

 

walmart

Walmart's share performance over the past 5 years. (Source: Google)

 

 

 

Olivia Lacenova, an analyst at Wonderinterest Trading Ltd.

 

Ovaj tekst predstavlja marketinšku komunikaciju. To nije nikakav oblik investicijskog savjetovanja ili investicijskog istraživanja ili ponuda za bilo kakve transakcije financijskim instrumentima. Njegov sadržaj ne uzima u obzir individualne okolnosti čitatelja, njihovo iskustvo ili financijsku situaciju. Prošla performansa nije jamstvo niti predviđanje budućih rezultata.

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