STORES Global Powers of Retailing 2009 - (Page 27) 2009 global powers of retailing Region/country profiles Average 2007 retail sales (U.S.$mil) $14,474 4,724 10,278 9,205 15,403 27,895 20,232 14,682 5,422 16,549 17,520 Average no. of countries, 2007 6.8 9.0 3.7 2.8 11.1 18.9 13.8 10.0 1.6 3.9 5.1 % Retail Sales from Foreign Operations 2007 21.3% 12.5 12.3 10.0 35.1 35.3 41.8 19.0 9.9% 11.8 11.7 No. of Companies operations. French and German retailers are the most international in scope. The 13 French retailers on the Top 250 list operated in an average 18.9 countries in 2007 and generated 35.3% of their sales from outside their domestic borders. The 21 German retailers did business in an average 13.8 countries and generated the highest share of sales from foreign operations, 41.8%. Top 250* Africa/Middle East Asia/Pacific Japan Europe* France Germany UK Latin America North America* U.S.* 250 6 39 24 99 13 21 21 8 98 87 Sales growth and profitability by level of globalization 10.0% 8.8% 8.0% 7.4% 7.5% 6.9% 6.0% 4.0% 2.7% 4.0% Results reflect Top 250 retailers headquartered in each region/country * Average number of countries excludes Richemont (Switzerland) and Dell & Alticor/Amway (U.S.), whose near-global coverage would skew the average Source: published company data and Planet Retail 2.0% 0.0% However, in recent years, the sales boost from international expansion activities has become less clear. There is very little difference in the 5-year composite growth rates between those retailers with a presence in 10 or more countries and single-country operators (7.5% vs. 7.4%). Retailers that stayed close to home actually outpaced their international peers by nearly two percentage points in 2007. Their stronger sales growth, however, did not translate as well into corresponding profitability. Companies operating exclusively in their home country had a composite net profit margin of 2.7% in 2007, while the more globally minded retailers enjoyed a 4.0% return. These findings are consistent with 2006 results. In part, these findings can be explained by the fact that many Top 250 retailers expanded their international operations significantly over the last decade. Room for continued expansion has become more limited, and global markets have become more competitive. For many, profitability rather than growth has become the priority in foreign investment. Looking at the level of globalization by broad geographic region, European and Africa/Middle East retailers dominate in terms of the degree to which they operate internationally. The average Top 250 European retailer had a presence in 11.1 countries in 2007. Over one-third, or 35.1%, of their total retail sales were from foreign Companies operating in 1 country 2007 Composite Retail Sales Growth Companies operating in 10+ countries 2007 Composite Net Profit Margin 2002-2007 Composite CAGR* * Compound annual growth rate in retail sales. Source: published company data and Planet Retail Most U.S. retailers still are not major players in international markets. Of the 87 U.S.-based companies among the Top 250, 49 have no international operations. On average, U.S. retailers operated in 4.2 countries in 2007. The vast majority of their sales, 88.3%, still come from domestic operations. Asia/Pacific (Japan, in particular) and Latin American retailers have been the laggards in going global. The 24 Japanese retailers on the Top 250 list operated in an average of just 2.8 countries in 2007. Only 10% of their retail sales took place outside Japan. Latin American retailers operated in the fewest number of countries, just 1.6. Their international operations comprised 9.9% of sales. www.deloitte.com/consumerbusiness STORES / January 2009 G2 http://www.deloitte.com/consumerbusiness
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