According to Namnews, Wal-Mart (the world's largest retailer) yesterday (15-03-2006) raised its stake Central American Retail Holding Co. (CARHCO) to 51% and will change the name of the Central America grocery operator to Wal-Mart Central America.

CARHCO has 375 supermarkets and other stores in Guatemala, El Salvador, Honduras, Nicaragua and Costa Rica and posted sales of about $2.2bn in 2005. CARHCO was formed in 2001 as a joint venture among three equal partners: Ahold, the Paiz family, who are the major shareholders of La Fragua; and Corporacion de Supermercados Unidos (CSU). Wal-Mart acquired Ahold's 33% stake in CARHCO in September 2005.

For an article heavily based on the Wal-Mart CARHCO press release, see CNN money.

In 2004, La Fragua, led by chairman Fernando Paiz, prospective vice-chairman of Wal-Mart Central America, ran into problems with its joint venture with Dutch company Royal Ahold. This episode culminated in Wal-Mart's intervention in 2005 broadening the US retail giant's reach into Guatemala.

La Fragua is the group that brings together Dispensa Familiar and La Despensa de Don Juan discount stores, Supertienda Paiz  supermarkets, Hiper Paiz hypermarkets, Maxi Bodega warehouse stores and Club Co., a membership wholesale club. Most are familiar names in Guatemala.

Wal-Mart's impact on local suppliers is notorious. You don't have to search far to find out the otherside of it's low price philosophy. For a summary of Wal-Mart's costs you could do worse than read Charles Fishman's article in Fast Company or watch the documentary Wal-Mart- The High Cost of Low Price. Wikipedia also has a really great overview of the issues involved in the Wal-Mart effect.

Of course in the UK, we don't escape the Wal-Mart empire with ASDA, becoming "part of the Wal-Mart family" in 1999. ASDA is Wal-Mart's largest overseas subsidiary, accounting for almost half of the company's international sales. For background information on ASDA and its Wal-Mart owners, check out Corporate Watch.

Watch this space for news on the implications for Guatemala's retail sector of having the world's largest retailer take control, at a stroke, of the country's largest retailer.