Alcea Buys Walmex's Restaurant Business

If there is a US restaurant chain operating in Mexico , there is a good chance that it is run by Alcea . It has franchise agreements with Domino's Pizza and Burger King in fast food, P.F. Chang's China Bistro , and California Pizza Kitchen in ' casual dining ' (the area between fast food and traditional restaurants) , and to top it all off , Alcea also runs Starbucks Coffee . The one area where Alcea's portfolio was a bit bare has now also been addressed after it agreed to pay Walmex ( Walmart 's Mexican business) MXN8.2bn (US$627mn) for its restaurant business Vips in a deal that suits both parties.

Walmex is leaving the restaurant business, which has been a square hole in a round peg for some time given the company's core business of food retailing, which is facing some headwinds right now as private consumption slows down in Mexico. Therefore, closing this deal allows Walmex to devote total attention to retail where same-store sales have been declining in 2013. On the other hand, Alcea will get its hand on the largest Mexican chain of restaurants with more than 350 locations , and in doing so has now addressed the one shortcoming you might have been able to level at it : the absence of a Mexican restaurant. Buying Vips should op en it up to an even wider demographic and that will complement its American franchises nicely.

Slowdown Compared To 2010-2011 Boom
Mexico Real Private Consumption Growth (% change y-o-y) - Historic & Forecast
This article is tagged to:
Sector: Food & Drink
Geography: Mexico

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