Walmart Pushes into Central America with Glidden

In March 2023, Walmart announced that it would spend close to $1.5 billion modernizing existing stores and opening new ones in Mexico and Central America. During an investor presentation in February of this year, Walmex, as the company is known in the region, said it had opened 162 new stores across Mexico and Central America in 2023, including 101 in the last three months of the year.

“Last year we opened the highest number of stores since 2013,” said Guilherme Loureiro, then the executive president and CEO of Walmart de México y Centroamérica, according to MexicoNow. In January of this year, the company named Cristina Ronski as senior vice president and CEO of Walmart Central America, replacing Flavio Cotini.

Walmex operates 3,569 stores and clubs in the region as well as 31 distribution centers across six countries, reaching 690 cities, according to a 2022 report by European Supermarket Magazine.

In Central America alone, the company has 896 stores in four formats and more than 38,000 associates in the five countries within the region, according to the company website. Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua are included in the company’s Central America network, which excludes Panama.

The Walmart expansion plan has been at work for several years.

“As we seek to prioritize our resources and accelerate our ecosystem in Mexico, Costa Rica, and Guatemala, we believe there may be attractive opportunities for further growth in Honduras, El Salvador, and Nicaragua that could be better captured under a different structure,” said Loureiro in 2022.

Walmart sales in Mexico and Central America are growing. In 2023, sales were $40.5 billion in the region, compared with about $36 billion in 2022, according to Statista.

The strong economic growth in the region helps these sales. Within Walmart’s five-country definition of the region, Costa Rica demonstrated the strongest growth in 2023 at 4.9% followed by Guatemala at 3.4%, Nicaragua and Honduras at 3.3%, and El Salvador at 2.3%, according to the United Nations Economic Commission for Latin America and the Caribbean (ECLAC).

Glidden to Lead Regional Walmart Paint Sales

In 2023, a new agreement between Walmart and PPG made Glidden paint the primary brand across 3,800 Walmart stores. The reported multi-year arrangement will enable PPG to control much of the shelf space at Walmart stores and super-centers. Glidden Grab-n-Go is featured at Walmart in 25 premixed colors, while 132 colors can be mixed.

Among other brands of paint and coatings carried by Walmart in the region are Flex Seal, Kilz, Krylon, and Rust-Oleum.

A range of paint manufacturers and distributors are present in the Central American market, led by Costa Rica, which has the most robust economy. The top five paint manufacturers in Costa Rica are Sur Quimica, with sales of $244 million per year; Mexichem Costa Rica, with sales of $53 million; Lanco & Harris with sales of $38 million, Pintuco Costa Rica with sales of $21 million; and HB Fuller Centroamerica, with sales of $16 million, according to Dun & Bradstreet.

Glidden also has forged a distribution agreement in Costa Rica with El Lagar stores.

“Our brand of paints and coatings is joining with another market leader, El Lagar, for distribution in Costa Rica, with the aim of further strengthening our presence in the country,” said Horacio Dobal, PPG Industries LATAM director of marketing and brand, according to a February report by the Costa Rica Star.

In El Salvador, the largest paint companies are Sherwin-Williams with $42 million in annual sales; Industrias de Foam with $37 million; Fultac with $10 million; GSQ El Salvador with $3 million in sales; and Pinsal with under $3 million in annual sales, according to D&B.

In Guatemala, the largest paint companies are Grupo Solid with $103 million in annual sales; Latin American Paint Corp with $32 million; Extru Export with $25 million; Sur Color with $22 million; and Celulosas y Colorantes with $15 million in sales, according to D&B.

In Honduras, the largest paint companies are Importadora de Produtos Internacionales with $12 million in annual sales; Pintuco de Honduras with $10 million in sales; HB Fuller Honduras with $4 million; Centro de Colores with $3 million in sales; and GSQ with $3 million in sales, D&B reports.

In Nicaragua, Pinturas Modelo, with annual sales of $8 million, is the only paint company listed by D&B in the country.
In Panama, outside of its agreement with Walmart, Glidden plans to bring its total number of company stores to 20 by the end of 2024, according to Dobal, in the Star report.

The largest paint companies in Panama are Centro de Pinturas Pintuco with $46 million in annual sales; Formica Distribution Center with $17 million; GSQ Panama with $10 million; Central de Pinturas with $10 million; and Global Paint Investment with $5 million in sales, D&B indicates.

Growth in Central America Robust, Housing Improving

Central America is poised to grow by 3.9% this year, resulting in a gross domestic product (GDP) for the region worth $510 billion, according to the International Monetary Fund. Within this figure, GDP per capita for the 63.8 million inhabitants of the region is estimated at $16,770 for 2024.

Housing programs are well developed in Central America, helping poor families move into better homes, which can help drive the demand for economy-grade paints and coatings.

During 2023, the UN Habitat implemented the New Urban Agenda and Post-Pandemic Recovery in Central America and the Dominican Republic. This program was launched in collaboration with the Andalusian Regional Government, the Swiss Agency for Development and Cooperation, the Secretariat for Central American Social Integration (SICA), as well as with the support of El Consejo Centroamericano de Vivienda y Asentamientos Humanos (CCVAH), governments, academia, and non-governmental organizations, the UN reports.

Within the region, Costa Rica’s housing programs are viewed as most successful. “Costa Rica’s subsidy program – one program of the National Finance System for Housing (SFNV) – is directed toward construction, land acquisition and construction, or purchase or improvement of an existing house,” according to a 2023 UN Habitat report.

Similarly, in Nicaragua, the Programa de Desarrollo Local (PRODEL) serves as a second-tier institution providing capital to a network of micro finance institutions (MRI) that lend to low-income families in accordance with PRODEL’s lending principles and strategy, according to UN Habitat.

Still, “Frequent mention is made of Nicaragua’s housing deficit of 400,000 to 500,000 in the national media, but the provenance of this number is not entirely clear,” UN Habitat noted.

Much work in the public housing arena remains to be done. This particularly true for housing in mega cities in the region, like San Salvador, in El Salvador, and in Tegucigalpa, Honduras, which show among the highest rates of poor households, ranging from 65% in Tegucigalpa to 65% in San Salvador, the UN notes.