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Chedraui Drops as December Sales Decline Sinks Mexican Retailers

Jan. 22 (Bloomberg) -- Mexican retailers including Grupo Comercial Chedraui SAB and Grupo Sanborns SAB retreated as a contraction in the nation’s same-store sales added to concern that higher taxes will hurt spending.

Chedraui, a Xalapa, Mexico-based supermarket company, retreated 1 percent to 40.42 pesos today, pushing the two-day decline to 1.8 percent. Sanborns, the department store operator controlled by billionaire Carlos Slim, dropped 0.8 percent to 26.23 pesos, extending its loss since Jan. 20 to 1.2 percent.

Sales at stores open at least a year fell 0.4 percent in December, Mexico’s retail association, known as Antad, said yesterday. That trailed a 0.3 percent increase analysts surveyed by Bloomberg had projected, according to the median of six estimates. The government instated a fiscal overhaul on Jan. 1 to increase some sales tax rates and implement new levies on junk food and sugary drinks.

“We pay more for almost everything,” said Gaspar Quijano, an analyst with Vector Casa de Bolsa SA de CV in Mexico City. Quijano said the tax increase is likely to keep retail spending low for the year, with same-store sales remaining negative.

Wal-Mart de Mexico, Latin America’s largest retailer, fell 0.9 percent to 32.32 pesos today, the lowest level since Nov. 11. Walmex, as the retailer is known, isn’t included in the same-store sales data reported yesterday.

To contact the reporter on this story: Sonali Basak in New York at sbasak7@bloomberg.net

To contact the editor responsible for this story: Brendan Walsh at bwalsh8@bloomberg.net

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