INTERNATIONAL. It is not only travel markets that have been experiencing a downturn. An unstable business environment and weak economic conditions have resulted in minimal growth for the world’s largest domestic retailers, according to a new report, despite the fact that they have been opening operations in many new markets.
In its annual list of the 100 top retailers, US consultancy and market research company Retail Forward said retailers’ average growth rate had fallen to less than +4% between 2001 and 2002.
“The world’s largest retailers cannot expect a stable business environment going forward,” commented Geoff Wissman, Retail Forward vice president.
“Slow economic recovery in the US combined with weak economies in Japan, Latin America and Western Europe, is forcing many retailers to seek alternative outlets for growth outside their home countries or regions which increases their exposure to new uncertainties,” he added.
Supermarket giant Wal-Mart again claimed number one position, as it has since 1990, with sales of more than US$229 billion in 2002. Carrefour of France and Home Depot of the US took the number two and three spots with sales of about US$65 billion and US$58 billion, respectively.
Retail Forward said it expects Wal-Mart’s aggressive global expansion will “continue to steal share away from conventional food, drug, and mass retailers at an alarming pace”.
Supermarkets still account for the largest share of sales among the Top 100, but they are losing ground to mass retail “supercentres”.
American retailers Kohl’s, Lowe’s, Walgreen and Dollar General were among the fastest-growing companies.
Kroger of the US, Metro of Germany, Royal Ahold of the Netherlands, Target of the US, Tesco of the UK, Costco of the US and ITM Enterprises of France completed the top 10 retail rankings.
In related news, Carrefour yesterday said it would take its South Korean stores upmarket in order to compete better with bigger domestic rivals in one of Asia’s key retail markets.
“We are upgrading the interior of our shops to a more department store-like atmosphere as Koreans don’t like the garage style of western outlets,” Chung Eu-hun, a spokesman for Carrefour in Korea, said.
Carrefour, which opened its first outlet in South Korea in 1996, has 26 stores in the country and 2002 sales of US$1.3 billion. Carrefour opened its first store in Egypt this year and has announced plans for a new venture in Japan. Metro launched into Vietnam in July.
“Retailers will find themselves battling for market share, rather than relying on growing markets,” said Wissman.
