News

Wal-Mart Mexico hit with new tax and money-laundering allegations

BY Katherine Boccaccio

Mexico City — Multiple reports on Wednesday revealed that Wal-Mart Stores’ Mexican arm has been leveled with new allegations concerning tax evasion and money-laundering schemes.

The accusations against Walmex were outlined in a letter by U.S. Rep. Henry Waxman, sent Tuesday to Wal-Mart CEO Michael Duke and suggesting that the company “"may have had compliance issues relating not only to bribery, but also to ‘questionable financial behavior’ including tax evasion and money laundering in Mexico."

The company said in a statement Wednesday that "it has no knowledge that (it) is being investigated by Mexican authorities concerning these issues."

Wal-Mart has been battling earlier reports that Wal-Mart de Mexico may have been paying middlemen in Mexico to facilitate store permits with bribes.

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FINANCE

PetSmart profit soars 31% in Q2

BY Katherine Boccaccio

Phoenix — PetSmart reported Wednesday that net income for the second quarter surged 31% to $79 million, from $61 million in the year-ago period.

Sales advanced 9% to $1.6 billion, and same-store sales grew 7.0%.

“Our performance in the second quarter was due to strength across all three merchandising categories, as well as across services,” said Bob Moran, chairman and CEO.

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FINANCE

Deloitte: Consumer spending slips for first time in five months

BY Katherine Boccaccio

New York — The Deloitte Consumer Spending Index, released on Wednesday, decreased slightly in July, marking the first decline since February 2012.

The Index tracks consumer cash flow as an indicator of future consumer spending.

“The Index slipped primarily due to a drop in real new home prices and a slight rise in jobless claims that offset improvements in real wages,” said Carl Steidtmann, Deloitte’s chief economist and author of the monthly Index. “Consumers enjoyed lower energy costs during the first half of the summer, but a rapidly increasing savings rate suggests they have put some recouped funds away for a rainy day rather than spending it. However, gas prices have started to tick back up. If confidence remains under pressure due to stagnant job growth, a stumbling housing market and Europe’s financial crisis, consumer spending may begin to contract heading into autumn.”

Other factors impacting the decline, said Deloitte, include rising interest income and savings rate, and lower gas prices since April.

“Consumers responded favorably to markdowns and promotions in July, and we anticipate retailers will finish the summer strong as families restock before sending their children off to school,” said Alison Paul, vice chairman, Deloitte LLP and retail & distribution sector leader. “However, that momentum may be seasonal and temporary if the Index’s decline is more than a blip on the radar.”

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