Global Powers of Retailing study 2009
Discounters on the rise as downturn leads to consumer cutbacksDOWNLOAD
As the global economy shifted in 2007 from relatively strong growth, to deceleration and on to modest recession in early 2008, consumers cut back on their spending and turned to discount retailers in ever increasing numbers, according to a new report, 2009 Global Powers of Retail, from Deloitte. Deloitte ranked the 250 largest retailers in the world by fiscal 2007 sales figures. Delhaize Group is the first Belgian Group to appear in the ranking, on place 33.
Deloitte's 2009 Global Powers of Retailing study shows:
The big movers were Schwarz Unternehmens Treuhand KG (Schwarz), owner of the Lidl supermarket chain, which climbed three places from 10th to 7th. Over the past five years, Schwarz has grown at a faster rate than any of the current Top 10 with a Compound Annual Growth Rate of 12.6%. Aldi GmbH (Aldi) also climbed this year and was the only new entry in the Top 10 taking the place of Sears Holdings Corporation (Sears). Forty four retailers experienced declining sales in 2007, compared with 36 the year before. Furthermore, the number of unprofitable retailers in the Top 250 doubled from seven in 2006, to 14 in fiscal 2007.
Koen De Staercke, Consumer Business Industry Leader at Deloitte Belgium; adds: “As we move through 2009, consumers will be intensely value-oriented, even more so than in the recent past. During our most recent Deloitte Christmas Study, we already noticed that consumers are shifting to more price focused retailers. For all retailers, this environment will require added attention to keeping costs under control.”
Wal-Mart Stores, Inc. (Wal-Mart) remained the world’s largest retailer ahead of Carrefour Group (Carrefour)
Tesco PLC (Tesco) and Metro AG (Metro) both climbed one place as The Home Depot, Inc (Home Depot) suffered its first-ever annual sales decline in 2007 and dropped two places to 5th. The first Belgian Group on the list is the Delhaize Group, which landed on the 33rd place in the ranking (last year, Delhaize was on place 32).
Belgian companies on the global retail market
The Delhaize Group and Louise Delhaize remain quite stable in comparison to last year which were ranked at number 33 and number 54. Colruyt, on the other hand, has moved forward and has landed the 123th place.
The foreign parent companies of other retailers active in Belgium are situated within the top half of the Top 250 ranking. Carrefour has been the global number 2 for many years now, and the German based Metro, often known in Belgium as Makro, is the fourth largest retailer leaving behind its two German competitors, LIDL and ALDI, at numbers 7 and 10.
Overview Top 10 retailers
Russian, Chinese and South Korean retailers among fastest growing
Last year’s study showed the introduction of two Russian and four Chinese retailers to the Top 250 list. This year, all six of these retailers have climbed significantly in the rankings. Indeed, two Chinese retailers now feature in the Top 100. Gome Home Appliance Group is ranked 63rd and is the 8th highest ranked retailer in Asia/Pacific, the first Chinese retailer to break into the regional Top 10.
Furthermore, of the ten retailers with the highest Compound Annual Growth Rate over the past five years, two are Russian, two are Chinese and one is South Korean. Indeed, four of the six fastest growing are from emerging markets. Russian electronics retailer Euroset Group had a Compound Annual Growth Rate from 2002-2007 of 108.5%. Because of the influence of the current financial crisis, difficult times are also ahead for the emerging markets, but they may not be hit as hard as developed economies.
Koen De Staercke: “China’s export growth has tapered off in real terms due to the slowing US economy and the rising value of the Chinese currency. However, inflation appears to be under control allowing the easing of monetary policy. The result is likely to be slower growth but not recession and as consumer spending should remain stable, retailers will be in a strong position. India also faces economic slowdown but not recession. While in the longer term, issues such as excessive regulation, poor infrastructure and limits on the supply of human capital could stifle growth, India should still grow more quickly than its historical pattern and retailers will continue to benefit.”
Many retailers which have gone global to try and take advantage of this growth have found the terrain challenging and not as lucrative as originally anticipated. However, the reasons for going global have not disappeared. Indeed, they have been reinforced by recent events. Retail spending is weak in developed countries and is likely to remain so in the near future.
Koen De Staercke comments: “For the world’s leading retailers, strong growth will come either from gaining market share at home, or moving into new markets – especially emerging markets. In the coming years, we may see second-tier retailers as well as more non-food retailers take the plunge. In addition, we are also likely to see retailers based in emerging markets continue the path of investing in other emerging markets and even in some developed markets.”
To download a copy of The Global Powers of Retail go to www.deloitte.com/consumerbusiness. Next to the Top 250 ranking, the report also features the “Top Trends for retailers in 2009”.
Deloitte - Managing in uncertain times
About the report
Deloitte Touche Tohmatsu (“Deloitte”) in conjunction with STORES Magazine, is pleased to present the 12th annual Global Powers of Retailing. The report identifies the 250 largest retailers around the world based on publicly available data for the companies’ fiscal year 2007 (encompasses fiscal year ends through June 2008). The report also provides an outlook for the global economy; an analysis of market capitalization in the retail industry; and a discussion of 10 major trends affecting retailers.
Deloitte refers to one or more of Deloitte Touche Tohmatsu, a Swiss Verein, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu and its member firms.
Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. With a globally connected network of member firms in 140 countries, Deloitte brings world-class capabilities and deep local expertise to help clients succeed wherever they operate. Deloitte's 165,000 professionals are committed to becoming the standard of excellence.