STORES Global Powers of Retailing 2009 - (Page 33) 2009 global powers of retailing one place, while Inditex jumped four places. After streamlining its retail portfolio, Arcandor (formerly KarstadtQuelle) moved down, as did Limited Brands. Otto Group, the #6 fashion goods retailer in 2006, was reclassed as a diversified retailer in 2007 to better reflect the breadth of its merchandise offerings, which include sporting goods, toys, electronics and furniture as well as fashion apparel and footwear. Two retailers appeared among the hardlines & leisure goods top 10 for the first time – Yamada Denki, a Japanese electronics retailer, and Amazon.com. These two companies displaced Staples and Office Depot, whose retail sales were redefined in 2007 to exclude their contractor businesses. In addition to Otto Group, previously classified in the fashion goods sector, the top 10 diversified retailers include a new company, J. Front Retailing. This company is new primarily in name only. It was formed in September 2007 from the merger of Japanese department store and supermarket retailers Daimaru and Matsuzakaya. In 2007, U.S.based closeout retailer Big Lots and Chile’s Falabella dropped out of the diversified group’s top 10. Sales growth and profitability by level of format diversification 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Companies with 90+% of Retail Sales from Single Format 2002-2007 Composite CAGR* 2007 Composite Retail Sales Growth Companies with No Single Format >50% of Retail Sales 2007 Composite Net Profit Margin % Retail Sales from Foreign Operations 2007 8.3% 7.9% 4.1% 4.5% 7.3% 3.4% 29.2% 16.4% Specialty Retailing on the Rise Retail formats operated by top 250 retailers in 2007 Supermarket Other Specialty Hypermarket/Supercenter/Superstore Convenience/Forecourt Store Department Store Apparel/Footwear Specialty Discount Store Electronics Specialty Non-Store Home Improvement Drug Store/Pharmacy Cash & Carry/Warehouse Club Discount Department Store 12 26 32 40 38 37 46 52 52 69 * Compound annual growth rate in retail sales. Source: published company data and Planet Retail 96 96 80 The majority of the Top 250 retailers are involved in the food sector, as has been the case since the inception of the Global Powers of Retailing report. In 2007, 134 companies, or better than half, operated supermarkets, hypermarkets, cash & carries, warehouse clubs, hard discount stores, convenience stores, or some combination of these. And that doesn’t even take into account the food sold by many department stores, discount department stores and drug stores. Although the supermarket remains the most common food store format, fewer Top 250 retailers operate this format than did so in the past. It is being displaced to some extent by larger hypermarkets on one hand and smaller convenience stores on the other. 0 20 40 60 80 Source: published company data and Planet Retail As noted in last year’s Global Powers of Retailing report, specialty stores of all kinds, from small boutiques to big-box superstores, are becoming more popular around the world. Over the last two years, more Top 250 retailers are operating apparel & footwear stores, consumer electronics stores, and home improvement stores. The broadly defined category of “other specialty” stores (including those specializing in furniture and home décor, office supplies, auto parts, hobby supplies, toys or sporting goods) is now tied with supermarkets as the most frequent format type. www.deloitte.com/consumerbusiness Format diversification has been a key growth strategy for many of the world’s largest retailers, particularly food retailers, over the past decade. With a diverse portfolio of store and non-store formats and channels, retailers can fine-tune their expansion strategies – both at home and across the globe – to specific market characteristics, demographics, and real estate opportunities. 100 At the same time, however, a significant number of successful retailers have continued to focus on a single format. In 2007, 140 of the Top 250 retailers derived 90+% of their sales from just one format. Only 36 companies did not have a single format that accounted for more than 50% of their sales. STORES / January 2009 G33 http://www.Amazon.com http://www.deloitte.com/consumerbusiness
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