MEXICO CITY (Reuters) - Wal-Mart de Mexico, Mexico’s biggest retailer, on Wednesday slashed its planned store openings for 2012 and cut its planned investment spending by 11 percent as it investigates allegations it bribed local officials to open stores more quickly.
The company, known locally as Walmex, said it has added steps to its process for opening stores and as a result it will open fewer than previously forecast this year.
“That is going to affect revenue and sales growth, which is going to have an impact on the share price tomorrow,” said Raul Ochoa, an analyst with brokerage Interacciones Casa de Bolsa in Mexico City.
Walmex shares closed down 0.84 percent at 36.43 pesos before the announcement.
Walmex’s U.S. parent Wal-Mart Stores Inc has come under fire from high-profile investors since the New York Times in April reported that the company used illegal payments to win market leadership in Mexico and some top Wal-Mart executives knew about the matter and tried to cover it up.
“They should have made this announcement a little more quickly,” said Ochoa, explaining that the company must have known its expansion plan would be affected after the bribery allegations emerged.
Walmex said it will open between 325 and 335 stores in Mexico and Central America in 2012. In February, Walmex had told investors it hoped to open 410 to 436 stores.
The chain also slashed its investment spending to 17.48 billion pesos ($1.27 billion) from 19.7 billion pesos announced in February.
While investors and analysts had expected the company would have to lower its spending and store opening plans, the cuts were more aggressive than expected, said one analyst who could not be named because of a company policy.
Mexico’s attorney general’s office has launched a preliminary investigation into whether Walmex bribed officials to expand its business.
Wal-Mart is also facing a criminal probe by the U.S. Department of Justice over potential violations of the Foreign Corrupt Practices Act, a U.S. law that forbids bribery of foreign officials. ($1 = 13.7215 Mexican pesos)
Reporting by Elinor Comlay; Editing by Leslie Adler, Bernard Orr