Retailer Wal-Mart de Mexico, known locally as Walmex, saw its fourth-quarter net profit drop thanks to price cuts and falling consumer confidence.

The company, majority-owned by retail giant Wal-Mart, said its net profit fell 12.8% to MXN7.3bn. Its operating profit was down 7.2% at MXN10.44bn.

Walmex revealed its  gross profit margin was down 60 basis points in the last three months of 2013 to 22.2%.

Describing 2013 as “a year of great challenges”, company chief executive Scot Rank said: “Given the reduction in disposable income and the decrease in consumer confidence, we placed our customer at the centre of our activities and invested strongly in prices.”

Mexico’s retail sector has been generally impacted in recent months by a loss of consumer confidence and depressed economic indicators.

Net sales were up 3.5% at MXN123.26bn.

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By GlobalData