World's leading money transfer company Western Union Co. ( WU ) announced that it has tied up with Mi Pueblo Food Center, based in San Jose.
The tie-up, however, failed to fuel up the stock which fell due to the prevailing broader weakness.
This step by Western Union reflects its strategy to expand its retail network presence. Western Union has picked up Mi Pueblo since it is the fastest growing independent supermarket in Northern California. Moreover, through this tie up, Western Union can avail of Mi Pueblo's already present wide range of immigrant clients who are Hispanics, Filipinos, Chinese and Indians regularly using money transfer services to send funds back home.
On the other hand, Mi Pubelo, which boasts superior customer service, will also be able to add another business to its already wide product and service portfolio for clients.
Western Union's services such as Money Transfer, money order and bill payment options will be available across Mi Pueblo's Bay Area, Monterey Peninsula and Central Valley locations with immediate effect.
With an industry-leading network, Western Union has over 500,000 agent locations and 100,000 ATMs that offer its money transfer services. The company plans to add new retail locations and more account-based options going forward. Western Union targets channels such as post offices, banks and mobile phone operators which provide a ready clientele. The company has recently forged a number of tie-ups with these carriers in many countries. We view that this ongoing investment in the brand and the addition of new agents will enable Western Union to enhance its market position in the money transfer service industry.
Western Union is expected to release third quarter earnings on Oct 30. The Zacks Consensus Estimate for third quarter is pegged at 39 cents per share, higher than the Most Accurate estimate of 36 which translates into Earnings ESP of -7.7%. Moreover, Western Union's Zacks Rank #4 (Sell) when coupled with a negative Earnings ESP makes surprise prediction difficult.