Mexico's Walmex cuts supermarket prices again

Retail powerhouse Walmart de Mexico (Walmex) started a fresh price-cutting drive across its supermarkets on Thursday, using its trusted formula to try to take even more market share from competitors. Walmex said it would cut prices on 10,000 items at its Bodega Aurrera, Wal-Mart and Superama stores, extending a strategy that has put it in first place in Mexico's fragmented retail sector.

"It's a strategy with which they are bound to keep gaining market share and which will make the competition harder for everyone else," said Credit Suisse analyst Rafael Shin. Walmex, a unit of No.1 global retailer Wal-Mart Stores Inc., started its low-price strategy in Mexico eight years ago, passing on cost savings from efficiencies of scale and its huge capacity for negotiating deals from suppliers.

Analysts see its latest cutting drive as a response to an expected economic slowdown in the second half and heightened competition from smaller rival Comerci. Other competitors include Soriana and Gigante. Walmex has more than 800 stores in Mexico.

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