The third quarter of 2024 has showcased an encouraging outlook for consumer companies in Mexico, despite various economic and social challenges. During this period, the country’s Gross Domestic Product (GDP) experienced moderate growth, translating into improved performance for several corporations operating within the consumer sector. This article addresses the economic outcomes reported by prominent firms, the impact of currency exchange rates, and challenges related to consumer spending behavior in the country.
Performance of GDP and Sector Growth
Mexico’s GDP growth reached 1.1% in real terms compared to the previous quarter and 1.6% year-on-year. Although this growth is modest, it reflects a recovery context that has benefitted various industries, particularly in the consumer sector. This increase in GDP can be attributed to factors such as export demand and an improvement in domestic investment.
Mexican companies, especially those operating in the consumer sphere, have adeptly adapted to the prevailing circumstances. A notable example is FEMSA, which encompasses retail through its Proximidad Américas division, operating stores like OXXO, as well as Coca-Cola FEMSA. In the third quarter, Proximidad Américas reported a 4.8% increase in total revenues and a 5.9% rise in operating profit. This performance is commendable, given that the company faced significant challenges, such as adverse weather conditions affecting distribution and a general decline in consumer spending in Mexico.
Impact of Exchange Rates on Business Performance
The economic performance of companies is influenced not only by internal factors but also by the international environment, particularly currency exchange behavior. In this regard, the depreciation of the Mexican peso against the U.S. dollar has positively affected companies with dollar-denominated operations. Firms with this revenue structure reported increases in their income and EBITDA, contributing to a more favorable outlook despite exchange rate volatility.
This phenomenon has allowed companies to somewhat offset the negative effects of reduced local consumption and unfavorable weather conditions. Export-oriented companies have particularly thrived, capitalizing on international demand, especially from the United States, which has helped maintain an optimistic economic climate in the country.
Challenges in Consumer Spending
Despite the positive results reported by certain companies, the context of consumer spending in Mexico has been characterized by moderated consumption. Factors such as adverse weather and overall spending restraint have impacted sales in key categories, particularly in the beverage sector. This situation has prompted companies to adjust their commercial strategies, focusing on maintaining stable sales in stores with the same format through increasing the average ticket per purchase.
However, despite these adversities, the focus on price optimization and product diversification has enabled many companies to report positive numbers collectively. This resilience is also supported by a consumer base that, while cautious, continues to show a preference for well-known and established brands in the market.
Additional Economic Indicators
The general economic context in Mexico has provided additional support for the sustainability of consumption growth. The improvement in export demand and an increase in public and private investment have revitalized the economy. These elements are crucial for sustaining ongoing growth in the medium and long term, allowing companies to plan strategies that address not only immediate realities but also future considerations.
In summary, the third quarter of 2024 has been a period of contrasts for consumer companies in Mexico. Despite the challenges faced, positive results in revenues and profits reflect a capacity for adaptation and resilience that will be vital on the path toward full economic recovery. The combination of a favorable exchange rate environment, improvement in external demand, and companies’ ability to innovate and adjust to new consumption dynamics presents a landscape that, though rife with challenges, offers glimpses of growth opportunities for the future of the Mexican economy.
Source: www.goaragon.es
