STORES Global Powers of Retailing 2009 - (Page 31) 2009 global powers of retailing acquisition of Coles, both companies appear on this region’s top 10 list due to a technicality. Wesfarmers acquired Coles in November 2007, after Coles’ July 31, 2007 fiscal year end. Wesfarmers’ 2007 fiscal year, as defined in this report, ended June 30, 2008. Therefore, both companies were included on the 2007 Top 250 list. Wesfarmers includes Coles’ results only since the date of the acquisition. AS Watson overtook Yamada Denki as the #6 retailer in the Asia/Pacific region. China’s Gome Home Appliance Group appeared at #8. This year, total sales for the parent company were recorded rather than only the listed company Gome Electrical Appliances Holding Limited, as was the case in 2006. The change in how this company was accounted for boosted Gome into the region’s top 10. South Korea’s Shinsegae moved up one place to #9, while that country’s Lotte Shopping Co. dropped to the #10 spot. Uny Co. and The Daiei, both from Japan, fell out of the Asia/Pacific top 10 in 2007. Many of the top Latin American retailers moved up the rankings in 2007. But, the region lost one company altogether from the Top 250 list. Grupo Gigante, the 9th Latin American retailer in 2006, sold its supermarket operations to Soriana in Dec. 2007. Its remaining retail operations were not large enough to keep the company among the world’s largest 250. The Africa/Middle East region gained two retailers in 2007 for a total of six Top 250 companies. Spar Group from South Africa is a Top 250 newcomer. Turkey’s Migros Türk (retailer #236 last year) has been reclassified for regional analysis purposes from Europe to the Middle East. The other five companies on the list are headquartered in South Africa. Pick ‘n Pay lost its leading position to Shoprite in 2007. a specific product sector if more than half of its sales are derived from that broadly defined product category. If none of the three specific product sectors account for at least 50% of sales, the company is considered to be diversified. Food and other fast-moving consumer goods dominated the Top 250, representing just over half of the retailers. These huge companies, with average retail sales of $19.1 billion in 2007, have made a strong push to globalize. On average, FMCG retailers had a presence in 4.9 countries in 2007, making this the least geographically dispersed sector. But when these companies enter a new market, they make their presence known. The Top 250 retailers of fast-moving consumer goods generated 23.4% of sales from foreign operations, the highest of the four product sectors. International expansion has helped this sector enjoy above average sales growth. However, as the composite net profit margin of 3.0% illustrates, it is historically a lower-margin business, especially on the food side. Sales growth and profitability by product sector 12.0% 7.6% 7.3% 7.3% 7.4% 8.8% 10.0% 9.6% 6.0% 6.8% 8.0% 7.3% 4.0% 4.3% Diversified 3.8% Product sector profiles No. of Companies Average 2007 retail sales (U.S.$mil) Average No. of countries, 2007 % Retail Sales from Foreign Operations 2007 2.0% 0.0% Top 250 Fashion Goods Fast-Moving Consumer Goods Hardlines & Leisure Goods Top 250* Fashion Goods Fast-Moving Consumer Goods* Hardlines & Leisure Goods* Diversified 250 46 130 55 19 $14,474 7,128 19,122 10,219 12,816 6.8 10.1 4.9 8.5 7.1 21.3% 15.2 23.4 21.0 6.1 2002-2007 Composite CAGR* 2.6% Food is focus for most Top 250 retailers 3.0% 4.0% 3.7% 2007 Composite Retail Sales Growth 2007 Composite Net Profit Margin * Compound annual growth rate in retail sales. Source: published company data and Planet Retail * Average number of countries excludes Richemont, Dell, and Alticor (Amway), whose near-global coverage would skew the average Source: Published company data and Planet Retail The Global Powers of Retailing analyzes retail performance by dominant retail product sector as well as by geography. Four sectors are used for analysis: Fast-Moving Consumer Goods, Fashion Goods, Hardlines & Leisure Goods, and Diversified. A company is assigned to The fashion retailers (apparel, footwear, jewelry, accessories and home textiles) are the smallest companies, with average sales of $7.1 billion, less than half the size of the typical Top 250 retailer. But they have extensive global retail networks. In 2007, the fashion goods retailers could be found in an average 10.1 countries. As a group, 15.2% of their sales came from outside their home country borders. Growth in this sector continues to be dragged down by the slow or negative sales growth of department store retailers in the world’s www.deloitte.com/consumerbusiness STORES / January 2009 G31 3.8% http://www.deloitte.com/consumerbusiness
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