Enriqué Ostale, president and chief executive officer of Wal-Mart’s Latin American business, has been assigned the additional role of running Wal-Mart de México y Centroamérica as president and ceo of the company, effective Jan. 1. He retains his role as chairman of the board of Wal-Mart de Mexico.
In October, Wal-Mart de Mexico said its president and ceo Scot Rank would step down after five years of heading the company.
“Mexico and Central America is a priority market for Wal-Mart,” said David Cheesewright, president and ceo of Wal-Mart International and a member of the Wal-Mart de México y Centroamérica board. “Enriqué’s cross-functional experience will ensure that we remain well positioned to serve the two billion customers that count on Walmex every year.”
He continued, “The dual role of ceo for both Walmex and Wal-Mart Latin America will give Enriqué the unique ability to leverage our expertise and capability across nine markets, taking advantage of the growth opportunities that the whole region has to offer.”
Wal-Mart de México’s performance has been bumpy. Walmex reported an 8 percent drop in third-quarter profit in October. Sam’s Club, an important business, has been experiencing low growth in the past few years. A spokesman said Walmex has been working to redefine and strengthen the offer at Sam’s and is starting to see signs of a recovery.
When the company announced a change in its board in April, Walmex named Ostale as Walmex executive chairman and said it would appoint a ceo at a later date. That obviously won’t happen with Ostale’s enhanced role in the company.
A Walmex spokesman said the Ostale news had nothing to do with an investigation begun two years ago into whether Walmex violated the Federal Corrupt Practices Act by bribing local officials to open stores faster. “The investigation goes on,” he said, but offered no other information. Wal-Mart now also faces a probe.
“Enriqué is very aware of the issues of the Mexican market,” said the Walmex spokesman. “Scot [Rank] has been reporting to Enriqué for two years. He knows what the opportunities are and will go deeper into our operations and allow us to execute better.”
Walmex has been divesting its non-core businesses. Earlier this year, Walmex sold its Vips restaurant chain to a franchise operator. Walmex on Thursday said it agreed to sell its banking unit to Grupo Financiero Inbursa, the bank owned by Carlos Slim. Walmex also entered into a strategic alliance with Grupo Financiero. The bank will expand its presence in stores and develop products for consumers in different store formats.
Walmex’s growth plan includes increasing same-store sales, opening stores and pushing forward the company’s e-commerce platforms, especially those developed in the past two years.
According to the spokesman, 30 percent of Walmex’s e-commerce sales come from shoppers using screens in stores to buy from the e-commerce site. The number is so high because some consumers don’t have at home the connectivity necessary to shop online and a portion of shoppers prefer to pay for products in a store, rather than electronically. Also, in-store shoppers may find they want a larger assortment of products than is available in the physical location.
“We see a lot of potential, and something that differentiates us from other online-only businesses is that we can take advantage of the four million people that visit our stores daily,” the spokesman said.