Stores 2008 Global Powers of Retailing - (Page 27) 2008 global powers of retailing However, the composition of the current list does appear to have been impacted by currency exchange rates. Compared with 2005, Canada gained one spot, Europe gained two, and the Asia/Pacific region (excluding Japan) added three more retailers to the Top 250. Geographically, the biggest change in the current list is Japan’s loss of five companies, dropping from 34 to 29. This suggests that the appreciation of the dollar against the yen had a negative impact on Japanese companies. More important, weak growth (measured in local currency) for many of the Japanese retailers contributed to the country’s decline in the rankings. Region/country profiles* No. of Companies Top 250** Africa/Middle East Asia/Pacific Japan Europe France Germany 250 4 42 29 91 13 18 20 9 104 93 Average 2006 retail sales (US$mil) $12,985 $4,738 $8,013 $7,448 $14,075 $23,444 $19,732 $13,384 $4,426 $15,097 $15,899 Average no. of countries, 2006 6.2 11.3 3.7 3.0 10.5 15.1 13.7 9.7 1.9 3.6 3.9 Average sales growth and profitability by region/country* 17.4% UK Latin America North America** 20% US** 12.8% 12.9% 15% 9.1% 9.2% 11.7% 10.6% 11.6% * Results reflect Top 250 retailers headquartered in each region/country ** Average number of countries excludes Dell, Alticor (Amway), Avon, and AAFES, whose global or near-global coverage would skew the average Source: published company data and Planet Retail 8.4% 8.1% 8.2% 10% 2.5% 2.8% Africa/Middle East Asia/Pacific Top 250 Europe Latin America North America Japan France Germany UK US 0% 2.2% 5% North American retailers also recorded above-average year-over-year growth in 2006: 11.7%, on average, vs. 9.2% for the Top 250. Over the longer term, however, the increase was not as impressive. From 2001 through 2006, compound annual sales growth for companies based in the US and Canada fell below the Top 250 average. Retailers in the Latin America and Asia/Pacific regions (excluding Japan) maintained their robust growth over the longer period. Three of the four South African companies also outpaced the Top 250’s five-year compound annual growth rate. The fourth, Metcash Trading, dragged down the average, having sold its Australian operations (which accounted for 65% of its sales volume) in 2005. Growth rates for the European retailers, especially those based in the saturated and intensely competitive markets of France, Germany and the UK, were sub-par. In search of continued growth, French and German companies, in particular, have expanded well beyond their domestic borders. On average, the French companies had retail operations in 15.1 countries in 2006. German retailers were doing business in an average 13.7 countries. These rates are more than double the average of 6.2 countries for the Top 250 as a whole. As a result, these retailers tend to be considerably larger than retailers based in other regions, but room for continued expansion has become more limited. 6.9% 4.5% 4.3% 4.6% 3.4% 5.6% 6.2% 3.4% 5.6% 5.2% 6.3% 4.4% 8.5% 3.8% 3.6% 8.5% 3.5% 3.7% 3.3% CAGR** 2001-2006 2006 Retail Sales Growth 2006 Net Profit Margin * Results reflect Top 250 companies headquartered in each region/country ** Compound annual growth rate in retail sales Source: published company data and Planet Retail As would be expected, retailers in emerging markets enjoyed above-average growth in 2006. The Latin American retailers among the Top 250 grew sales 12.9%, on average. This was followed closely by four retailers from South Africa that comprise the Africa/Middle East group, with 12.8% year-over-year growth. Asia/Pacific, with 8.1% average retail sales growth, was dragged down by Japan’s 5.2% pace. Excluding Japan, the other Asia/Pacific-based companies grew at an average 15.2% pace. www.deloitte.com/consumerbusiness STORES / January 2008 G27 http://www.deloitte.com/consumerbusiness
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