Now in its 21st year, Deloitte’s Global Powers of Retailing report identifies the 250 largest retailers globally by revenue, and examines current global trends and economic prospects in retail.
Top-250 Australian stalwarts, Wesfarmers and Woolworths, maintain their top-25 global retailers’ placings at 21st and 23rd, respectively (compared with 21st and 24th last year). A third Australian retailer has also joined the list, with JB Hi-Fi ranking 218 following the acquisition of electronics chain The Good Guys in November 2016 and a consistent year-on-year comparative sales growth.
There are now 38 Top-250 global retailers operating in Australia – one lower than last year. While there are two new additions in JB Hi-Fi and UK department store Marks and Spencer (now established with a dedicated online Australian business), this increase is offset by Debenhams and Abercrombie & Fitch falling out of the Top 250. The third is Lowe’s Inc, which exited its operations in Australia with the closure of Masters Home Improvement.
“In 2017 we saw a retail market that was growing overall, but at the same time, the level of competition among retailers also continued to increase,” said David White, national leader of Deloitte’s Retail, Wholesale & Distribution Group.
“Ongoing population growth, a strong tourism market and improving wages are all set to ensure the overall retail market continues to grow in 2018. However, with the increase in competition from both international and domestic retailers, we can expect to see further consolidation in the sector.”
According to the report, the global retail environment appears to be relatively stable, although Australia is facing a number of potential disruptors, which could have a significant impact.
Amazon – Although the online retailer’s initial launch of its on-shore business didn’t have the ‘big bang’ effect some commentators were expecting, Mr White says people underestimate Amazon at their peril: “As Amazon builds out its infrastructure and services in Australia in 2018, we can expect its presence and influence on the market to grow significantly, particularly in the second half of the year and in the lead up to Christmas. We’ll have to wait and see the ultimate impact of Amazon’s on-shore business in Australia, but it’s important to remember this also creates opportunities for Australian retailers.”
Lidl – There continues to be significant speculation that the discount supermarket operator, owned by the fourth-largest retailer in the world, The Schwarz Group, is preparing to enter the Australian market following recent land purchases, securing of trade markets and talent acquisition. “Should Lidl choose to set up shop in Australia, it will take time for the full effect to be felt, in much the same way ALDI took a number of years to grow its market share here,” Mr White said. “The impact of Lidl in markets such as the UK has been transformational for the sector. It’s certainly another case of wait and see.”
China – A number of Chinese retailers and e-platform providers are either entering the Australian market or expanding their operations here. “These fast-growing Chinese retailers and e-commerce platform providers are starting to make a significant impact on the global retail market,” Mr White said. “This provides Australian retailers with a huge opportunity to take advantage of high Chinese demand for Australian products.”
With only 15 per cent of the Top-250 retailers globally operating in the Australian market, says Mr White, we can expect further competition to come from international retailers.
“And with so much change and uncertainty in the Australian retail landscape, 2018 could be a pivotal year for many Australian retailers,” he said.
Top 250 global retailers currently operating in Australia:
|Name||Global ranking||Country of origin||FY2016 retail revenue (US$m)|
|Costco Wholesale Corporation||2||US||118,719|
|Aldi Einkauf GmbH & Co oHG||8||Germany||84,923|
|Seven & i Holdings Co, Ltd||20||Japan||51,385|
|The IKEA Group (INGKA Holding BV)||27||Netherlands||37,982|
|The TJX Companies, Inc||32||US||33,184|
|Apple Inc / Apple Retail Stores||34||US||28,600|
|LVMH Moët Hennessy-Louis Vuitton SA||35||France||26,904|
|H & M Hennes & Mauritz AB||42||Sweden||22,602|
|Fast Retailing Co, Ltd||58||Japan||15,739|
|The Gap, Inc||61||US||15,516|
|Marks and Spencer Group plc||67||UK||13,837|
|Steinhoff International Holdings NV||68||South Africa||13,596|
|John Lewis Partnership plc||70||UK||13,361|
|L Brands, Inc||76||US||12,574|
|Toys “R” Us, Inc||82||US||11,540|
|Otto (GmbH & Co KG)||89||Germany||10,805|
|NIKE, Inc / Direct to Consumer||109||US||9,082|
|Foot Locker, Inc||125||US||7,766|
|Compagnie Financière Richemont SA||138||Switzerland||7,007|
|Office Depot, Inc||170||US||5,603|
|Woolworths Holdings Limited||191||South Africa||4,944|
|Hermès International SCA||204||France||4,613|
|JB Hi-Fi Limited||218||Australia||4,240|
|Forever 21, Inc||229||US||4,000|
|Tiffany & Co||232||US||3,903|
|Ralph Lauren Corporation||243||US||3,682|
The top-10 global retailers by revenue are Wal-Mart Stores, Inc (US), Costco Wholesale Corporation (US), The Kroger Co (US), Schwarz Group (Germany), Walgreens Boots Alliance, Inc (US), Amazon.com, Inc (US), The Home Depot, Inc (US), Aldi Group (US), Carrefour SA (France), and CVS Health Corporation (US).