Elisa Liam's questions to Fomento Economico Mexicano SAB de CV (FMX) leadership • Q4 2024
Question
An analyst from Bank of America asked about the extent to which store cannibalization contributed to OXXO Mexico's traffic decline and sought clarity on the outlook for operating leverage amidst rising wages and a softer economy.
Answer
CEO Jose Antonio Fernández attributed the traffic softness to multiple factors, including increased rainfall and a post-election economic slowdown, stating that cannibalization from new stores is minimal and well-controlled. CFO Martin Arias Yaniz added that underperforming stores are closed quickly. Executive Juan Fonseca addressed operating leverage, noting that while gross margin expanded significantly, much of that gain was offset by persistent labor cost pressures from minimum wage increases in Mexico.