Retail Giants On The March

The year 2003 was a good one for global and international retailers, according to new research from the grocery industry think-tank IGD. Nine of the top ten groups improved their ratings in its Global Retail League, which is designed to look beyond mere turnover to underlying global capability and strength.

IGD's 'Global Retailing 2004' reports that Wal-Mart has overtaken Ahold and moved into second place. Wal-Mart is by far the world's leading retailer in terms of turnover, with sales of $245bn (year to Jan 2003), but IGD rates Carrefour as the clear number one global player, with Wal-Mart five points behind. Carrefour has operations in 33 countries and a strong domestic market position, regarding Europe as its 'enlarged home market', although it continues to develop scale in Asia, South America and the Middle East.

Carrefour has also developed into a multi-format retailer with strong competence in the supermarket and discount sectors and aims to develop all three of its formats (hypermarkets, supermarkets and discount stores) in each country. Last year's No. 2 Ahold has had a challenging year and is in the process of withdrawing from Asia and South America, while Wal-Mart's international sales have grown to $40.8bn. Wal-Mart's George clothing is now available in six markets and it has increased its stake in Seiyu to 37.7% while introducing Wal-Mart systems and completing its first store conversion in Japan.

Tesco is up six points although still in fifth place. 17.9% of sales are now delivered from its international operations and it holds leading positions in six of its operating markets - the UK, Republic of Ireland, Hungary, Poland, Slovakia and Thailand.

It has also been a good year for Auchan, which has upscaled its activity in key European markets, entering Russia and increasing its stake in its Italian partner, the Eurofind holding company.

IGD Chief Executive, Joanne Denney-Finch OBE, says that there are many uncertainties in developing a global retail business. 'Retailers seeking to develop scale in the emerging markets can no longer rely on expectations of strong market growth to deliver strong performance - instead, they must ensure that they have world-class operational capabilities, combined with a high-degree of cultural awareness and the ability to understand new market dynamics'.

'In the future we will see companies rationalise their global activities and exit countries where they do not foresee an opportunity to develop a leading position or where the outlook and business profitability are disappointing. Ultimately, these exits and the subsequent consolidation implied, will result in a handful of global retailers emerging. These leading players will also be complemented by a host of strong national players in each market, which will ensure that the global retailers cannot become complacent'.

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas unless otherwise stated.

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