Walmex is well-positioned for economic downturn, CFO says

Mexico's biggest retailer, Wal-Mart de Mexico, is prepared to confront "difficult moments" should the economy slow down, its chief financial officer said, at a time consumers have been hit by high interest rates and inflation.

Walmex's core food business is relatively insulated from economic swings as consumers tend to make cuts elsewhere in tight times, said Olga Gonzalez, who began serving as CFO in July. With brands ranging from the budget Bodega chain to the higher-end Superama line, Walmex can meet Mexican consumers at a variety of price points.

"We feel we have done the foundational work so that if we have more negative macroeconomic conditions, or if they worsen, we can manage to present an offer of value," Gonzalez said.

"We think we are prepared to confront difficult moments."

Gonzalez was interviewed at the Reuters Latin America Investment Summit. Walmex's net profit in the second quarter more than doubled, boosted by the sale of clothing chain Suburbia to department store and shopping mall operator El Puerto De Liverpool.

The company has been working to nudge its business toward e-commerce. Online sales rose about 35 percent in the second quarter, though the segment remains less than 1 percent of Walmex's total sales.

The Mexican market presents some barriers to e-commerce, with relatively low internet penetration and limited consumer credit, Gonzalez said. Yet Walmex's dense concentration of stores in cities has proved helpful in shipping goods from stores to consumers' homes, a thorny problem in e-commerce.

"In contrast with the United States, where Walmart grew primarily in the suburbs, in Mexico the investments were first in the big cities, which is a competitive advantage due to the proximity of our customers," Gonzalez said.

Assuming the CFO role after seven years with Walmart, Gonzalez said she aims to stay the course in executing the company's strategy.

"We will look to maintain our margins, perfecting our assignment and efficiency of capital," she said.