Deloitte report "2012 Global Powers of Retailing"

Sales of world's largest retailers increase by more than 5 percent

Brussels, 16 January 2012 – Today, Deloitte announces the results of its 15th annual Global Powers of Retailing report. The report shows that the world's 250 largest retailers recorded sales growth in excess of 5 percent in the fiscal year 2010 . The economic outlook for 2012 is however uncertain, which concerns the retailers. Although they have all lost several places in the ranking compared to last year, the top 250 global ranking still contains the same four Belgian companies as last year, with Delhaize Group as first Belgian retailer on the list in 37th place (last year, they were in 32nd place).

The Deloitte 2012 Global Powers of Retailing report found that profitability improved, with net profit that has increased to 3.8 percent in 2010, up from 3.1 percent in 2009. Nearly all of the companies that published their bottom-line results operated at a profit in 2010, and more than two-thirds of the reporting companies saw an improvement in their net profit margin. Aggregate sales of the top 250 retailers reached US$3.94 trillion in 2010. The proportion of sales generated from foreign operations increased to 23.4 percent in 2010, up from 22.2 percent in 2009. Also the pace of globalization increased last year, with 88 new market entries made by 40 retailers across 57 countries.

While this performance has been impressive, retailers are concerned about the deterioration in the global economy over the latter half of 2011.

Top 250 Retailers; Delhaize Group remains first Belgian retailer in list

The makeup of the Top 10 changed slightly for the first time since 2007. While Wal-Mart is still ranked first, Walgreens continued its steady climb up the Top 250 ranking to become one of the world's 10 largest retailers in 2010, displacing Target which fell to 11th place.
All 10 companies on the leader board saw an increase in retail sales in 2010, led by Schwarz (+9.4%) and Costco (+9.1%).

The share of total top 250 retail sales accounted for by the top 10 retailers slipped again in 2010 to 29.4 percent, down from 30 percent in 2009 and a high of 30.2 percent in 2008.

Top 10 global retailers
 Company  Country of Origin  Rank  2010 Retail Sales
(US$mil)
 Annual growth
2005-2010 (%)
Wal-Mart US 1 418,952 6
Carrefour France 2 119,642 3.9
Tesco UK 3 92,171 9.3
Metro Germany 4 88,931 3.8
The Kroger Co. US 5 82,189 6.3
Schwarz (Lidl) Germany 6 79,119 9.8
Costco US 7 76,255 8.0
Home Depot US 8 67,997 -2.5
Walgreen Co. US 9 67,420 9.8
Aldi US Germany 10 67,112 5.9

When looking at the Belgian retailers that can be found in the top 250 global ranking, we see that the same four companies as last year made it into the global ranking: Delhaize Group, Louis Delhaize (Cora, Match), C&A Europe and Colruyt. Although all four companies had an increased annual growth percentage, they all lost several places in the ranking compared to last year. Koen De Staercke, the Partner leading the Consumer Business industry program at Deloitte Belgium explains: "A weaker euro against the U.S. dollar in 2010 compared to 2009 had an impact on the European retailers, causing some to drop in the dollar-denominated rankings despite solid growth".

Belgian retailers in top 250 ranking
 Company Rank 2011  Rank 2010  2010 Retail Sales
(US$mil)
 Annual growth
2005-2010 (%)
Delhaize Group 37 32 24,918 1.8
Louis Delhaize 63 51 14,100 1.7
C&A Europe 108 94 8,697 4.8
Colruyt 128 121 7,428 8.6

Global economic outlook

The global economy's growth in 2012 is likely to be slower than in 2011 in many of the world's leading markets. The Eurozone crisis continues to drain investor and consumer confidence, while growth in the United States next year is unlikely to significantly reduce unemployment. China and the other BRIC economies are slowing as a result of tighter fiscal policy and weaker global growth, and while Japan is expected to grow strongly next year, this is only because 2011 was so poor following the devastating earthquake and tsunami.

Koen De Staercke noted: "However, retailers may find some silver lining in this otherwise cloudy environment. One positive effect of slower global growth will be the continued dampening of commodity prices. For retailers, this means some improvement on the cost side of the balance sheet, while retail price inflation in some economies presents an opportunity for improved profit margins, even in the context of slow top-line growth. The most significant silver lining is in the long term. Even though the economic environment in 2012 will be difficult, the long-term outlook for the global economy remains good. Despite demographic and structural headwinds, China will continue to grow while other emerging markets such as India, Brazil, Turkey, Indonesia, and parts of South America and sub-Saharan Africa offer the possibility of stronger growth as well as new opportunities for the world's leading retailers."

Online presence popular method for retailers to test new markets

Physical openings in new countries increased in 2010. At the same time, another popular method for retailers to use to test new markets was to establish an online presence. Most retailers operate across multiple channels (e.g., stores, catalogues, online, call centers, social networking, digital displays, mobile), but few understand how consumers are using and shopping across each of these channels and even fewer have a seamless, consistent, and comprehensive multichannel strategy.

Koen De Staercke remarks that: "As consumers become savvier, they are increasingly taking charge of their shopping experience, identifying and exploiting many different sources of information and channels to optimize the different elements of their shopping journey. Since customers do not distinguish between channels, retailers will have to support seamless integration among all their channels such as access to their full range of products, customer information, and order information."

In the coming years, it is likely that consumers will expect to use a mobile device to get real-time inventory information about the closest stores, or to order a product while in a store and have it delivered at home. In 2012, retailers will need to continue developing innovative multichannel solutions.