Stores 2008 Global Powers of Retailing - (Page 32) 2008 global powers of retailing Top 10 retailers by major product sector The Top 10 retailers by major product sector did not change substantially in 2006. Walgreens has joined the ranks of the Top 10 retailers of fast-moving consumer goods, while Target has been reclassed as a “diversified” retailer as no single product category accounted for 50% or more of its 2006 sales. Target’s largest category, “consumables and commodities,” generated 32% of its 2006 sales volume. With 133 companies, or more than half of the Top 250, predominantly sellers of fast-moving consumer goods, it is not surprising that all of the Top 10 retailers in this sector are among the 15 largest retailers in the world. The hardlines & leisure goods sector is comprised of 53 retailers, the same number as last year. Compared with 2005, Dell dropped out of the Top 10 and was replaced by Toys “R” Us. The fashion goods group experienced a shake-up with LVMH joining the Top 10 list in eighth place and Inditex replacing H&M as the bigger multi-national specialty chain. LVMH’s ascension into the ranks of the 10 largest fashion goods retailers was due primarily to a change in the way the company’s sales were accounted for. In prior years, LVMH’s retail sales, for purpose of the Global Powers of Retailing study, included only the company’s “Selective Retailing” segment. This year’s edition includes the retail sales of the branded shops in all of the company’s business segments. As noted earlier, Millennium Retailing of Japan, last year’s #9 fashion goods retailer, has been removed from the list as a separate company as its sales are now consolidated under Seven & I Holdings. More modest, but still impressive gains were also made through organic growth by companies such as Falabella and Cencosud in Chile, Colruyt in Belgium, and PetSmart and Abercrombie & Fitch in the US. However, the biggest positive changes in rank were due not to particularly rapid growth, but rather to changes in how the retail sales of various companies (e.g., LVMH mentioned above) were accounted for. Other information sources were used this year for many of the privately held companies in order to provide a more consistent basis for year-over-year comparisons. This had a significant impact on many convenience store companies in the US, such as Wawa, RaceTrac Petroleum, and QuikTrip. As a result, these companies should be evaluated on the basis of their individual sales growth rates rather than their rise in the rankings. Forty companies dropped 10 or more places down the list in 2006. Fifteen of those companies are based in Japan, representing more than half of all the Japanese companies on the Top 250. As noted above, at least part of this fallout was the impact of exchange rates. Two companies dropped more than 100 places from last year’s rankings. Albertsons LLC (#143), which experienced the biggest decline, is all that remains of Albertsons, Inc. That company was 16th on last year’s list and once the second largest grocery chain in the US. In January 2006, Albertsons entered into a series of agreements providing for the sale of parts of its businesses to SuperValu, CVS, and a consortium of investors (the current Albertsons LLC). Saks, Inc. had the second-biggest decline, plummeting 120 places from #113 to #233. The retailer sold its Saks Department Stores Group (Proffitt’s and McRae’s) to Belk in July 2005 and its Northern Department Stores Group (operating under various nameplates) to Bon-Ton Stores in March 2006. Changes in rank worth noting Among this year’s Top 250, 34 companies ascended the ranks by 10 or more places, many as a result of mergers and acquisitions. These “climbers” include GameStop, the world’s largest video game retailer with over 4,700 stores around the world. The company merged with rival Electronics Boutique in October 2005 to land at #134, up from #201 the year before. Canadian food and drug retailer Metro acquired A&P Canada from Tengelmann near the end of its fiscal year 2005. This resulted in a jump in the rankings from #121 to #77. In the US, SuperValu acquired more than 1,100 stores from Albertsons, Inc. in June 2006 to boost the company 39 places to #27 among the world’s largest retailers. G32 STORES / January 2008 www.deloitte.com/consumerbusiness http://www.deloitte.com/consumerbusiness
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