2016 started with a major shake-up for Walmart Brazil. The company decided to close some 60 stores to gain breathing space in the complex local economic scenario. At the same time the Arkansas-based firm appointed Flavio Cotini as new CEO. He now has the challenge to reignite growth for the Brazilian unit of the largest retailer in the world.
The newly sworn-in Walmart CEO knows where the tides are floating his ship and how to steer it. “This year we already know the rules of the game: there is a crisis, so we prepare for crisis. There is greater predictability. It’s different from 2015, when economic forecasts deteriorated very quickly,” he told Latin Trade at Council of the Americas’ São Paulo CFO Forum on April 6. Cotini was the company’s CFO from January 2014 until he became CEO in January this year.
Cotini explained that the closure of stores in the country, equivalent to about 5 percent of local sales, was a difficult decision, but it was motivated by their performance and the need to make revisions and adjustments to grow in the future.
With 485 stores in Brazil, Walmart’s revenues surpassed $8.28 billion (BRL 29 billion) in 2015, similar to 2014. These figures place Walmart as the third largest retailer in the country, behind Pão de Açúcar Group (Casino) and Carrefour, according to a survey by Brazilian Institute of Retail Business and Consumer Markets (Ibevar).
According to Cotini, the biggest challenge is to make the network profitable again. The task will be grounded on a two-pronged approach of systems integration and cost reduction.
Regardless of the outcome of the political crisis, Flavio Cotini says that life will surely go on. “With or without a crisis, people will continue to buy beans and rice. People can stop consuming some products, substitute others, but they will not stop consuming,” he said.
In that scenario, Cotini sees growth and increased profits possible. “We are starting this year better than the last and should finish it with growth compared to 2015. I’m confident we can also be more competitive increasing our market share and eliminating inefficiencies. The crisis stimulates the search for greater competitiveness. But if we need to review our positions in Brazil, let’s do it. Those are the rules of business.”
This interview was conducted by Latin Trade.