MEXICO CITY, Jan 10 (Reuters) - Mexico's leading retailers agreed to cut prices on 300 household goods, ranging from eggs to shampoo, from Thursday
through the end of March as part of a government-backed plan to fight inflation.
Powdered milk, beans, pasta, and soap are also on a broad list of products that will come down in price, said Vicente Yanez, head of the retail
association ANTAD.
"Inflation in Mexico has cost us dearly," he told the Televisa network.
Retailers will also freeze the price of tortillas, a staple of the Mexican diet, Economy Minister Eduardo Sojo told reporters.
Mexican inflation came in at 3.76 percent in 2007, within the central bank's target range and one of the lowest rates in recent years. But global
demand for food commodities and increased amounts of grains being diverted for use in biofuels are expected to push prices higher this year.
Last year, retailers also agreed to temporarily freeze tortilla prices after they jumped 25 percent, driven by higher U.S. demand for corn-based
ethanol.
Mexico's central bank said in its most recent quarterly report that inflation would hover above 4 percent for most of this year before falling toward
its 3 percent goal by the end of 2009.
Members of ANTAD, the National Association of Retailers, include leading retailer Wal-Mart de Mexico (WALMEXV.MX: Quote, Profile , Research), Soriana
(SORIANAB.MX: Quote, Profile , Research) and Comercial Mexicana (COMEUBC.MX: Quote, Profile , Research).
Retailers, which had a rough ride in 2007 due to weak consumption and a slowing economy, expect to lure more customers with the discounts but analysts
think suppliers could become the weakest link.
"From a first glance, (the price rollback) could be good for retailers as these kind of deals could boost store traffic and the real impact is
transferred to the producers and suppliers," said an analyst who asked not to be named.
Walmex, a unit of U.S. giant Wal-Mart Stores (WMT.N: Quote, Profile , Research), plans to cut prices on over 300 products, a company spokesman said on
Thursday. He declined details on the range of discounts.
The company makes price cuts on different products, from mayonnaise to blenders, throughout the year. But at least twice in 2007 it had a broad-base
price reduction for dozens of household goods for at least 30 days.
According to preliminary ANTAD data released last week, its members' same-store sales may have risen only 1.1 percent in 2007, compared with 4.3
percent in 2006. (Editing by Leslie Adler)bajajudy - 1-11-2008 at 12:17 PM
That is good news for the Mexican people and for those of us who live here.
The peso was over 11 to 1 yesterday. Havent checked today.DENNIS - 1-11-2008 at 12:34 PM
They wouldn't have to drop prices in concert if they would compete with each other by offering lower prices. If they did, prices would seek their
own level.vandenberg - 1-11-2008 at 12:50 PM
Quote:
Originally posted by DENNIS
They wouldn't have to drop prices in concert if they would compete with each other by offering lower prices. If they did, prices would seek their
own level.
I'm with you Dennis.
Strange way of doing business.Cypress - 1-11-2008 at 01:30 PM
DENNIS, You've nailed it. Price-fixing by the big boys.DENNIS - 1-11-2008 at 02:14 PM
Speaking of price fixing, monopolys and competition [ or lack thereof ], I remember of an instance back in the 90s in Guadalupe Valley.
There were fewer vintners in the valley at the time and they wanted to have a wine festival to showcase their products. Nafta was in place and the
producers of the event invited a few California wineries to bring their wares south and be part of the show.
Vino Sto. Tomas got wind of the foreign invitation and backed out of the show. The thought of competition ran them off.
At the time, Sto. Tomas had a corner on the local wine market and charged insane prices for the parts-wash in a wine bottle. For instance, they had
[ have ] a vino tinto, packaged variously including a gallon bottle with a screw top. In those days, the price was 18 dollars for the gallon and
they had no competition. By freaky coincidence, I recently saw the same gallon bottle of Sto. Tomas Vino Tinto at Ensenada Smart and Final with the
same price, 18 dollars, of course in pesos.
Anyway, that's the end of that story. I'm gonna go take my meds now so I can come back later, refreshed and raring to go, or something.
[Edited on 1-11-2008 by DENNIS]aldosalato - 1-11-2008 at 03:44 PM
do you still believe in Santa Claus?
In Mexico during last 3 years prices have been going up between 8-10% per year (anyway similar lies come from US government nowadays)
To start the year gasoline was increased close to 10%.
Whoever say that prices will go down is just lying.
Oil is close to USD 100 per barrel. Same with grains and all food supplies.
Price-fixing by the big boys.