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Sales for world’ top 250 retailers - 6 percent gain over previous year

Latin American Retailers Are the Most Profitable and Fastest Growers in the World

Sofia, January 24, 2007 — The amount of money consumers spent with
the top 250 retailers in the world reached a record $3.01 trillion between
July 1, 2005, and June 30, 2006, up 6 percent over last year's total of 2.84
trillion, shows a new report from Deloitte Touche Tohmatsu, in
conjunction with STORES magazine.

The retail sales data shows that consumer spending around the globe
reached an impressive $90,000 per second, or $5.4 million per minute, at
the world’s 250 biggest retailers.

"The Global Powers of Retailing 2007" ranks the largest 250 retailers
worldwide by revenue, lists the 50 fastest growers in the world and
examines the hurdles retailers face in an increasingly challenging environment.
The rankings are based on publicly available data for the companies' fiscal
years ended during the period from July 1, 2005, to June 30, 2006, referred
to in this press release as "2005."

Ira Kalish, consumer business director at Deloitte Services LP's Deloitte
Research, said, "Although the global economy showed signs of stress, the
year ended June 2006 was healthy for most of the world’s leading retailers.
However, sustaining such performance will not be easy."

Movers and Shakers
Although the top 10 retailers have been a relatively stable group in recent
years, the report reveals that over the last decade Home Depot, Tesco,
Costco and German hard discounter Schwarz have taken dramatic leaps up
the rankings (see chart).

Company
Wal-Mart
Carrefour
Home Depot
Metro
Tesco
Kroger
Target
Costco
Sears Holdings*
Schwarz 

Country of Origin
US
France
US
Germany
UK
US
US
US
US
Germany 

Rank 2005
1
2
3
4
5
6
7
8
9
10

Rank 2000
1
2
4
5
13
3
10
14
7
29 

Rank 1996
1
8
24
4
18
13
12
23
7
33 

 

 

 

 

 

Sources: published company data
and Planet Retail
*Rankings prior to 2005 represent
predecessor company, Kmart.

Kalish said, "Revenue growth
is the key measure of how
effective a business
has been at identifying and satisfying customer needs. As we move into
2007, the challenge for retailers will be to keep up the momentum in revenue
growth."

However, not every company enjoyed strong growth. Forty-nine retailers,
or 20 percent of the top 250, saw retail sales decline. Nearly half of these
are based in Europe, where the series of demergers and divestitures — such
as Ahold, Littlewoods, Modelo Continente and KarstadtQuelle — led to a
decrease in company revenues. Partially as a result, European companies in
the top 250 saw below average revenue growth (8.6 percent). By
comparison, Latin American retailers enjoyed the greatest growth (20.3
percent), more than double the top 250 average (8.4 percent).

Latin American Retailers Lead in Profitability
According to the report, the average net profit margin for companies in the
top 250 showed healthy improvement, increasing to 3.5 percent, compared
with last year’s 2.7 percent and significantly above the average margin from
2000 (1.7 percent). Latin American retailers were the most profitable by
region, with net income averaging 4.4 percent of sales, while Asia Pacific
retailers were the least profitable on average, at 2.9 percent. Within Europe,
United Kingdom companies led the pack with a 5.5 percent average net
profit margin. Germany, historically a low-margin market, trailed the others
with an average profit margin of just 2 percent.

'Fast Moving Consumer Goods' Is the Biggest Group
The biggest sector by sales volume in the top 250 is the Fast Moving
Consumer Goods (FMCG) group (such as Wal-Mart, Carrefour and
Metro), with a total of 133 companies. However, the group has below
average performance compared with the rest of the top 250. Noteworthy is
that on average the FMCGs in the top 250 operate in the fewest number of
countries, compared with companies in other sectors.

Specialty Retailers Take Root in Top 250
Although the majority of the top 250 have been in the food sector (including
supermarket, cash and carry, hard discount and convenience stores) over
the past 10 years, their presence on the list is shrinking. In 1995, 61 percent
of the top 250 operated food-related formats; however, 135 of the top 250
retailers (58 percent) were food-related in this year's report, as specialty
stores expanded internationally and displaced food retailers on the list.

Deloitte U.K. Partner and Global Consumer Business Leader Lawrence
Hutter said, "The rising share of specialty retailers points to a burgeoning
middle class worldwide — with more disposable income to spend on
apparel and home-goods — as well as the globalization of fashion
trends. These trends will likely give rise to more global expansion by
specialty retailers, in order to meet this group’s new shopping needs."

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