UPDATE 1-Mexico's Walmex to open fewer stores in 2014, focus on remodeling
By Gabriela Lopez
MONTERREY Feb 24 (Reuters) - Mexico's Wal-Mart de Mexico said it will increase its business investment 7 percent this year but shift its focus to remodeling existing stores rather than opening new stores.
Wal-Mart de Mexico, which has slowed store openings amid a U.S. Department of Justice bribery investigation, will spend 15 billion pesos ($1.1 billion) in 2014 but it will only increase its floor space by 5.2 percent, Chief Financial Officer Rafael Matute told analysts on Monday.
Last year Wal-Mart de Mexico spent 14 billion pesos on investments and opened 235 stores in Mexico and Central America, increasing its floor space by 7.1 percent.
Walmex, which last week reported a sharp drop in its fourth-quarter profit, has been struggling amid tough competition and a sharp drop in consumer spending in Latin America's No. 2 economy.
Chief Executive Scot Rank said Mexico's biggest retailer needs to focus on improving performance at existing stores and the company also plans to invest in its grocery delivery program.
Mexico's economy expanded by just 1.1 percent in 2013, its slowest rate of growth in four years.
Executives also said Walmex will propose paying an extraordinary dividend of 0.40 pesos, worth some 7 billion pesos, once the company completes a planned sale of its restaurant unit.
Shares in Walmex, which is controlled by U.S. retailer Wal-Mart stores Inc, closed down 0.56 percent at 28.61 pesos before the meeting with analysts.
The U.S. Department of Justice is investigating whether Wal-Mart paid bribes in Mexico to obtain permits to open new stores there, and whether executives covered up an internal inquiry into the payments.
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