Global powers and challenges revealed

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
Amazon.com, Inc 6 US 94,665
Aldi Einkauf GmbH & Co oHG 8 Germany 84,923
Seven & i Holdings Co, Ltd 20 Japan 51,385
Wesfarmers Limited 21 Australia 47,690
Woolworths Limited 23 Australia 40,773
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
Inditex, SA 38 Spain 25,734
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
Décathlon SA 86 France 11,062
Otto (GmbH & Co KG) 89 Germany 10,805
NIKE, Inc / Direct to Consumer 109 US 9,082
GameStop Corp 112 US 8,608
Foot Locker, Inc 125 US 7,766
Dufry AG 127 Switzerland 7,736
Kering SA 128 France 7,727
Compagnie Financière Richemont SA 138 Switzerland 7,007
Staples, Inc 148 US 6,662
Office Depot, Inc 170 US 5,603
Next plc 175 UK 5,443
Williams-Sonoma, Inc 188 US 5,084
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
Coach, Inc 238 US 3,810
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).

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