Page 92 - DMGT551_RETAIL_BUSINESS_ENVIRONMENT

Unit 4: Retailing Structure

Bureau (2009), the total amount of sales for the U.S. Retail Industry (including food service and Notes
automotive) was $4.13 trillion. Of the world’s 10 largest retail companies in the world, five of
them are from the US and five are from Europe. The top ten global retailers had combined sales
of $1.15 trillion in 2008, according to international consulting group, Deloitte. According to the
U.S. Bureau of Labor Statistics, around 14.4 million people were employed in the U.S. Retail
Industry as of April, 2010. Although retail employment was increasing every month at the
beginning of 2010, due to the recent recession of the economy, the retail employment numbers
were still the lowest they’ve been for the past decade. Due to the decline in retail jobs and the
increase in overall unemployment, the retail job market in 2010 is extremely competitive at all
levels.

Table 4.4: Economic Concentration of Top 10 Retailers

Top Name of Country of 2010 Retail 2010 2010 net 2010 2010 asset
250 Company Origin sales Retail profit return turnover
Rank (US $mil) sales margin assets
growth
1 Wal-Mart U.S. 418,952 3.4% 4.0% 9.4% 2.3
2 Carrefour France 119,642 4.8% 0.6% 1.1% 1.7
3 Tesco U.K. 92,171* 6.7% 4.4% 5.7% 1.3
4 Metro Germany 88,931 2.8% 1.4% 2.7% 1.9
5 Kroger U.S. 82,189 7.1% 1.4% 4.8% 3.5
6 Schwarz Germany 79,119* 9.4% n/a n/a n/a
7 Costco U.S. 76,255 9.1% 1.7% 5.6% 3.3
8 The Home U.S. 67,997 2.8% 4.9% 8.3% 1.7
Depot
9 Walgreen Co. U.S. 67,420 6.4% 3.1% 8.0% 2.6
10 Aldi Germany 67,112* 5.2% n/a n/a n/a
Top 10* $1,159.778 5.0% 3.0% 6.4% 2.1
Top 250* $3,940.747 5.3 3.8% 5.8% 1.5
Top 10 share of total 29.4
*Sales weighted, currency-adjusted composite growth rate
Source: Published company data and Planed Retail

Retail Industry Rebounds in 2010 as Global Economy Stages Fragile Comeback

2010 started off on a positive note, but as it progressed the global economy began to face
headwinds. In the United States, the end of fiscal stimulus, combined with continuing problems
in the housing and credit markets, caused a deceleration in growth that led to fears of a double-
dip recession. Europe saw the start of the Eurozone crisis when Greece required a massive
bailout to avoid default on its sovereign debts.
In emerging markets, on the other hand, growth in fiscal 2010 was unusually strong, resulting in
accelerating inflation. Governments in such disparate places as China, India and Brazil responded
by tightening monetary policy. Rising interest rates led to severe upward pressure on currency
values. Consumer spending in emerging markets rose at a healthy rate, although the monetary
tightening in some countries caused deceleration.
Nevertheless, the global retail industry rebounded in 2010. Sales-weighted, currency-adjusted
retail sales rose a solid 5.3 percent for the world’s Top 250 retailers, up from anemic 1.2 percent
growth for 2009’s Top 250. As consumers emerged from the doldrums, more than 80 percent of
the Top 250 retailers (205 companies) saw their 2010 retail sales increase, compared with less
than two-thirds (159 companies) in 2009.

LOVELY PROFESSIONAL UNIVERSITY 87