The expansionist drive of the Wal-Mart juggernaut has made its way across the Rio Bravo and is swiftly replicating its United States success in Mexico. The influence of an enterprise of Wal-Mart’s magnitude in a developing country such as Mexico, is so vast and multifarious that it is next to impossible to examine its full dimensions within the scope of this paper. Rather than attempt to do so, this paper will highlight some of the more penetrating ramifications of Wal-Mart’s presence in Mexico. It will focus on the impact that Wal-Mart has had in reshaping the Mexican retail market, especially as regards consumer patterns and business practices. Buttressed by the liberalized trade environment ushered in by the North American Free Trade Agreement of 1994, Wal-Mart de Mexico (Walmex) has succeeded in establishing the kind of footprint, if not dominance, in the Mexican economy that has allowed it to touch the daily lives of a large segment of the Mexican consumer public.

A dramatic growth in revenues and profits has guaranteed the success of the company’s expansion efforts: Wal-Mart de Mexico is now the largest r

etailer in Mexico with 555 restaurants and stores, and the second largest employer in Mexico with 95,000 associates. (Wal-Mart report). Not only can it boast 9.7 billion dollars in net sales for the fiscal year 2001, but it also claims to “have created 9,817 new jobs and invested more than 3.3 million man-hours in activities focused on better training our people.” Besides succeeding financially by taking the Mexican market by storm, Wal-Mart has also invested many hours in improving the efficiency and customer service skills of its employees. When associates (employees) chose to pursue a career elsewhere, they are leaving with the additional skills acquired while working at Wal-Mart. Wal-Mart, therefore, is introducing new skilled laborers into the Mexican workforce, something that has been much needed.

One of the difficulties of employee management in Mexico is that of high turnover rates. Employee turnover has become more of a problem in recent years as Mexican workers gain additional skills and can command higher wages for those skills. Jennings (1997) writes that employee lawsuits are virtually unknown, and that the result has been that employers have had little incentive to make their

tailored its Mexican stores to reflect these regional preferences. Customers know what to expect and have come to equate quality and Wal-Mart in many respects. This is not a magnanimous gesture, but rather an expression of sound management: offer products for sale that people want and need to buy. One of the primary corporate values established by founder Sam Walton himself is respect for both customers and employees.

No.2 supermarket operator, Controladora Comercial Mexicana (Comerci), is reported to have seen profits plunge 34% in 2001. Gustavo Campomanes, corporate treasury director, said that Comerci must follow in Wal-Mart’s lead by forming partnerships with foreign companies. This is the only way to succeed in the near future, or else Wal-Mart will undercut all competition by consistently slashing prices while still providing them at the same value. Not only are they looking at possible mergers, but Comerci has also launched its own version of everyday low prices, which is somewhat of a gamble since Comerci does not have the same pricing clout with suppliers as Wal-Mart.

Much of the attraction to Mexico still lies in lower labor costs, but as Mexico becomes more prosperous, that attraction increasingly leans toward proximity of markets as those markets grow. One complaint of critics of globalization is that such cultural integration serves to diminish the differences that have set Mexicans apart from Americans since the beginning of time, but Mexico's culture has proved to be strong and inimitable. It remains necessary for multinationals locating in that country to adapt to the style of employee relations that best work in that culture. That adaptation is necessary if the multinational organization is to continue to take advantage of potential lower costs while maintaining high quality (Greer and Stephens, 1996).

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