Sales growth for the world’s top 100 retailers in 2001 was significantly hampered by the global economic slowdown forcing many companies to retrench or divest as profitability became challenging. The Top 100 Retailers Worldwide 2001, compiled and analyzed by Retail Forward, reports that the average growth rate for the Top 100 retailers from 2000 to 2001 dropped to 4 percent, down significantly from the average annual rate of 9.4 percent reported from 1996 to 2001.
As the expected economic recovery has stalled, Retail Forward anticipates slow growth to persist for retailers in 2002 and into 2003 and merger and divestiture activity to pick up steam. Healthy retailers will be looking to fill in their existing portfolios to be well-positioned for the economic recovery while others will need to shed non-core assets in order to focus on their core competencies and improve their financial positions. And, because most of the world’s top retailers will not be in a position to challenge Wal-Mart on the basis of price, successful retailers will be those that can offer a strong value proposition.
“Consumers the world over are driven by a strong need for value and convenience,” comments Ira Kalish, co-author of The Top 100 Retailers Worldwide 2001, Senior Vice President and Chief Economist for Retail Forward. “Retailers that fail to deliver on these are clearly in peril,” he adds.
The Top 100 Retailers Worldwide 2001, was developed using company annual reports or other public sources of information. Results are based on retail operations only unless non-retail operations were not broken out separately.
Highlights of this year’s The Top 100 Retailers Worldwide report include:
Wal-Mart Continues to Pull Away
Wal-Mart again tops the list of the Top 100 retailers worldwide, a position it has held since 1990. “Steady growth, strong consumer appeal and global aspirations indicate that Wal-Mart will remain atop the list for years to come,” comments Kalish.
Fastest Growers Steam Ahead
A handful of retailers posted exceptional growth despite the economic downturn. Target made the largest move up the list due to solid growth at its Target Stores division. Four of the Top 10 fastest growing companies on this year’s list include Kohl’s, Lowe’s, Dollar General, and Walgreen. “These successful retailers are expanding rapidly and thriving based on solid strategies that resonate well with value conscious consumers,” says Kalish.
Supermarkets Still Lead
Supermarkets continue to account for the largest share of companies and sales among the Top 100 retailers (33 percent). Hardlines specialty stores, mass retailers, warehouse clubs, and drug stores, realized significant growth in 2001. Retail Forward expects hardlines specialty stores to continue to gain share of Top 100 sales as more of these companies expand globally.
Global Retailers Gain Share While Foreign Sales Drop
The good news is that the number of retailers with global operations increased in 2001 and global retailers also increased their share of Top 100 sales last year. However, the percentage of sales outside of the home country for global retailers dropped from last year to less than 28 percent
Wal-Mart’s global ambitions, increasing consumer demand for value and convenience, vast shifts in market
share of various retail formats, and intense pressure on global suppliers to sell to a smaller number of very large accounts is creating an uncertain global retail environment. As competition intensifies and the global retail landscape becomes increasingly concentrated, the world’s top retailers will be required to change their strategies in several ways.
“Retailers need to prepare for slower growth ahead and a more discerning consumer and they need to know when to exit a market when the business environment becomes unsuitable, comments Kalish. “The bottom line is that retailers need to differentiate on the basis of something other than price, while still offering a strong value proposition,” Kalish believes. “And, they will need to seek new customers in new locations with new formats to survive,” he concludes.
Who are the World's Leading Retailers?
Top 100 Retailers Worldwide
Economic Concentration of the Leading Companies based on 2001 Annual Sales (in millions – U.S. Dollars)
|1||Wal-Mart Stores, Inc.||USA||
|3||The Home Depot, Inc.||USA||
|4||The Kroger Co.||USA||
|9||Sears, Roebuck and Co.||USA||
|Total Top 10||
About Retail Forward
Retail Forward, Inc. is a globally focused management consulting, market research, and executive development firm specializing in retail intelligence and strategies. The company’s syndicated research and executive development program known as the Retail Forward Intelligence Program, provides over 250 member companies with an authoritative perspective on the retail and consumer products industries. The Top 100 Retailers Worldwide 2001 is part of the Retail Forward Intelligence Program. Visit http://www.retailforward.com/ for more information.