STORES Global Powers of Retailing 2009 - (Page 26) 2009 global powers of retailing . This report uses sales-weighted composites rather than simple arithmetic averages as the primary measure for understanding group financial results. Therefore, results of larger companies contribute more to the composite than do results of smaller companies. Because the data have been converted to U.S. dollars for ranking purposes and to facilitate comparison among groups, composite growth rates also have been adjusted to correct for currency movement. While these composite results generally behave in a similar fashion to arithmetic averages, they provide better representative values for benchmarking purposes. Composites and averages for each group are based only on companies with data. Not all data elements were available for all companies. It should also be noted that the financial information used for each company in a given year is accurate as of the date the financial report was originally issued. Although a company may have restated prior-year results to reflect a change in its operations or as a result of an accounting change, such restatements are not reflected in this data. This study is not an accounting report. It is intended to provide an accurate reflection of market dynamics and their impact on the structure of the retailing industry over a period of time. For many companies, the retail sales figures in this report may reflect adjustments to reported sales figures to exclude non-retail operations. (See “Study methodology and data sources” on G36 for more information.) As a result of the above factors, growth rates for individual companies may not correspond to other published results. Economic concentration of top 10 retailers, 2007 Top 250 rank 1 2 3 4 5 6 7 8 9 10 Name of company Wal-Mart Carrefour Tesco Metro Home Depot Kroger Schwarz Target Costco Aldi Country of origin U.S. France UK Germany U.S. U.S. Germany U.S. U.S. Germany 2007 retail sales (U.S.$mil) 374,526 112,604 94,740 87,586 77,349 70,235 69,346 63,367 63,088 58,487 2007 Retail sales growth 8.6% 5.5 10.9 7.2 -2.1 6.2 12.7 6.5 7.0 5.7 Top 10* Top 250* Top 10 Share of Total * Sales-weighted, currency-adjusted composite growth rate Source: published company data and Planet Retail 1,071,328 3,619,257 29.6% 7.2% 7.6% As a result of these uneven growth patterns, the Top 10 leader board got a bit of a shakeup in 2007. Wal-Mart and Carrefour remained secure in the top two spots, with Wal-Mart alone representing just over 10 percent of Top 250 sales. But the Home Depot dropped from third place to fifth. Hard discounter Schwarz Group moved up considerably from tenth place to claim the number seven spot, overtaking Target and Costco. The company reportedly opened over 400 net new stores in 2007, generating double-digit sales growth in both its Lidl discount store and Kaufland hypermarket divisions. Schwarz’s chief rival, Aldi, was the only new entrant to the Top 10. A 4.4 percent decline in sales for Sears Holdings, number 10 in 2006, dropped the retailer well out of contention at thirteenth place. Economic concentration of the top 10 slips In a reversal of a long-term trend, economic concentration of the leading companies fell in 2007, although retail sales for the Top 10 did exceed $1 trillion for the first time. Unlike in prior years, where the big got very much bigger, the world’s 10 largest retailers saw their share of Top 250 sales decline slightly to 29.6 percent from 30.1 percent in 2006. Combined sales for the Top 10 increased 7.2 percent in 2007, compared with 7.6 percent for the Top 250 overall. While most of these retailers registered solid increases over their prior year results, nine of the Top 10 saw their rate of growth slow, in some cases substantially, compared with their 2006 sales gains. Only two companies posted double-digit increases in 2007, compared with six of the Top 10 in 2006. The Home Depot suffered its first-ever annual sales decline in 2007. Retail sales dropped 2.1 percent as comp store sales fell 6.7 percent. The company’s total sales declined nearly 15 percent, having sold its wholesale distributor HD Supply in August 2007. Foreign operations top 20 percent of sales Globalization continues apace throughout the retail world. On average, the Top 250 retailers operated in 6.8 countries in 2007, up from 6.2 countries in 2006 and 5.9 in 2005. In total, 21.3% of sales came from outside retailers’ home countries. International expansion has been an important aspect of many large retailers’ growth strategies. Indeed, the larger the company, the more likely it is to operate beyond its domestic borders and to generate a higher percentage of its sales from foreign operations. G2 STORES / January 2009 www.deloitte.com/consumerbusiness http://www.deloitte.com/consumerbusiness
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