Walmart Investing $316 Million In Brazilian Store Remodels

As Walmart faces a growing number of retail rivals in the Brazilian market, the retailer appears to be playing defense, investing about $316 million in its Brazilian Walmart locations over the next two years to remodel 120 of its stores in the country.

Walmart, which is the third-biggest diversified retailer in Brazil, has already launched its remodel program and expects to continue the upgrades in Brazil through 2019, according to news from Reuters.

The company has already performed 10 percent of the refurbishments, said Flavio Cotini, CEO of Walmart’s Brazilian unit, to reporters attending the LATAM Retail Show this week. Brazil’s biggest grocer, Grupo Carrefour Brasil SA, is doubling its store count through 2020, while Walmart rival GPA SA is renovating its stores in a bid to welcome consumers who are ready to spend money again following a long Brazilian recession in the economy, according to Reuters.

During the first quarter of this year, Brazil’s economy grew by 1 percent, ending the country’s nearly two-year recession, which was the longest recession in the Latin American nation’s history, the BBC said. As of June 2017, about 14 million Brazilians were still unemployed in the wake of the economic downturn. However, companies are getting back to creating jobs, and employment is starting to pick up, prompting retailers like Walmart to try and entice shoppers with fresh remodels.

Consumers in Brazil have been inceasingly drawn to “cash and carry” stores, where they can find discounts by purchasing items in bulk, Forbes reported earlier this year. In addition, Brazilians find local shops very convenient, leaving Walmart somewhat caught in between these two types of formats. The retailer owns the “Maxxi” cash and carry store in the country, but it has seen increasing competition from rivals. Thus, the company’s latest investments in Brazilian store improvements, under CEO Flavio Cotini’s direction, could be a way to boost Walmart’s profile in the country, Forbes notes.