Mexico retailers poised for Q2 bump despite inflation rebound

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By Natalia Siniawski Mexican retailers are expected to post solid second-quarter 2025 results, boosted by favorable calendar effects, though global economic risks and sticky inflation present challenges for brands in the year's second half, analysts told Reuters.Favorable calendar effects have made analysts more optimistic about the quarter. Still, investors will watch results from Mexico's Walmart BMV:WALMEX, Chedraui BMV:CHDRAUI/B, and Liverpool BMV:LIVEPOL/1 for signs of how retailers were attracting cautious consumers as inflation ticked up and the economy weakened.Analysts said inclusion of the Easter holiday in the second quarter will give sales figures a boost from last year, when Easter was in the first quarter. Walmex has already announced record in-store and online sales during Mexico's Hot Sale, a nine-day promotional period that began in late May. An LSEG poll of analysts forecast Walmex will post a 9% revenue and 5% profit jump from a year earlier.Antonio Hernandez, an analyst at Actinver, told Reuters many workers received their annual profit-sharing bonus payments in May, which increased their spending power during the promotional period."The Hot Sale's timing was able to benefit from the boost of PTU payment... especially for retailers more exposed to discretionary consumption like clothing or electronics," Hernandez said. Ariel Mendez, consultant at Ve Por Mas financial group, said the Easter effect could boost soft drink and snacks retailers like Femsa BMV:FEMSA/UB, which owns Mexico's omnipresent chain of Oxxo convenience stores, and bottled drink giant Arca Continental BMV:AC.In May, Mexico's annual headline inflation rose outside the central bank's target range of 2%-4%, where it remained in June. Core inflation, considered a better indicator of price trends, reached its highest level in June since April 2024. Analysts said retailers have rolled out strategies inviting consumers to shift habits rather than cut back on purchases. For instance, they have been promoting cheaper store-brand products, offering loyalty programs and using smaller packaging."Retailers are increasing private label participation, as these brands are cheaper, more accessible for customers, and often yield better margins for the stores," said Hernandez.Walmart, Chedraui, and Liverpool have all expanded these lines across multiple price tiers.Analysts will likely ...

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