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Two Australian companies in world’s top 30 retailers


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Australian retail giants, Woolworths and Wesfarmers, are listed in the world’s top 30 retail companies, according to the Deloitte Global Powers of Retailing 2010 report released today.

The report, which identifies the 250 largest retailers by revenue globally for the fiscal year 2008 (encompasses fiscal years ended through June 2009), lists Woolworths in 26th position and Wesfarmers in 28th position.

Despite a small drop of four places from the previous year (22nd in 2009 and 26th in 2008), Woolworths was ranked 11th in the world for the highest market capitalisation to assets ratio (also known as the Q ratio).

Wesfarmers, whose acquisition of Coles in November 2007 helped advance the WA-based company’s 2003-08 compound growth rate by 62.7% (the second largest globally), jumped eight positions (36th in 2009 and 176th in 2008).

Both Australian retailers are in third and fourth places respectively in the Asia-Pacific top ten, which also included six Japanese retailers.

Andrew Griffiths, Audit partner and Deloitte’s Consumer Business leader, said the two iconic Australian companies did exceptionally well in a difficult year for the global retail industry.

“Woolworths and Wesfarmers punch above their weight and have weathered the global economic storm better than most retail companies globally. Their respective listing in the top 30 retailers globally is extraordinary given our relatively small population.

“The other companies in the top 30 originate mainly from heavily populated countries such as the United States, Germany, UK, Japan and France. And if you add the fact the most of those also operate in multiple countries, unlike Woolworths and Wesfarmers, you get a far better appreciation of the way Australian retailers fare.”

Mr Griffiths added that the Federal Government’s stimulus package, handed out towards the end of the 2008-09 financial year, played a role in steering the Australian retail sector out of the turbulent economic times.

Globally: retail sales grow, but profits take a hit

Despite one of the sharpest economic contractions in decades, the world’s largest retailers were able to increase sales by 5.5% in fiscal year 2008 (encompasses fiscal years ended through June 2009), with total retail sales equalling around $3.8 trillion. However, the report shows that the global financial crisis affected retailers’ bottom line. Profitability at the largest 250 retailers in the world fell from 3.7 percent in fiscal 2007 to 2.4 percent in 2008.

Two-thirds of the 184 retailers that disclosed their bottom-line results saw their net profit margin decline in 2008, with 30 retailers operating at a loss. This trend affected almost every geography and category. Retailers in Europe saw their profitability fall from 4.1 percent in 2007 to 2.7 percent in 2008, while those in North America fell from 3.6 percent to 2.4 percent. Only those in Africa and the Middle East saw increased profitability.

The composition of the Top 10 retailers in the world remained the same this year. This group now accounts for over 30 percent of the total retail sales of the Top 250 retailers. Wal-Mart remained the world’s largest retailer, ahead of Carrefour. Despite Tesco’s better sales growth rate, relative currency strength against the US dollar enabled Metro to climb above Tesco, back into third place.

Company Country of Origin Rank 2008 Retail Sales (US$mil) CAGR* 2003-2008 (%)
Wal-Mart US 1 401,244 9.4
Carrefour France 2 127,957 4.3
Metro Germany 3 99,004 4.8
Tesco UK 4 96,210 12
Schwarz Unternehmens Treuhand Germany 5 79,924 12.3
The Kroger Co. US 6 76,000 7.2
The Home Depot, Inc. US 7 71,288 1.9
Costco Wholesale Corporation US 8 70,977 11.2
Aldi GmbH & Co. Germany 9 66,063 5.1
Target Corp. US 10 62,884 6.1
Woolworths Australia 26 36,002 11.6
Wesfarmers Australia 28 32,716 62.7

*CAGR – Compound annual growth rate is calculated in each company’s local currency.

To read the full press release and the report, download the attachments below.

 

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Contacts

Name:
Andrew Griffiths
Company:
Deloitte Australia
Job Title:
Partner
Phone:
Tel +61 2 9322 7035
Email
andgriffiths@deloitte.com
Name:
Petros Kosmopoulos
Company:
Deloitte Australia
Job Title:
Corporate Affairs & Communications
Phone:
Tel: +61 3 9671 6093, Mobile: +61 4 0700 0926
Email
pkosmopoulos@deloitte.com.au

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