NEW YORK — The biggest retailers are getting bigger.
“The State of Global Retailing: Planting Seeds of Sustainable Growth” seminar at the National Retail Federation convention here drove home that point with a list of the top 10 retailers. Wal-Mart has held the number-one spot since 1996, Carrefour has been second since 2000, and Home Depot began occupying third place in 2002.
“The 10 largest retailers continue to capture market share,” said Ira Kalish, global director of Deloitte, which presented its “Global Powers of Retailing Study” at the convention.
Although “globalization” has been a buzzword for a decade, most retailers still operate on their home soil. However, stores with higher levels of globalization experienced greater sales growth, Kalish said. And while international sales are important to the growth strategies of many large retailers, foreign operations account for only 14.4 percent of retail sales of Deloitte’s top 250 companies.
Most U.S. retailers are not major global players, but American firms still dominate the top 250 list with 93 entries, or 37.2 percent of the total.
Total sales for the top 250 retailers reached $3.01 trillion in 2005, up 6 percent from the previous year’s $2.84 trillion. The 10 largest global retailers were: Wal-Mart, Carrefour, Home Depot, Metro, Tesco, Kroger, Target, Costco, Sears Holdings and Schwartz.
Of the big five economies, Japan remains the most insular. Among that country’s leading 250 retailers, two-thirds operate only in Japan. The Deloitte study concluded that Japan’s economic recovery has begun and that the country is poised to “experience consumer-driven growth rather than relying on exports. Japan’s economic evolution will be a critical component in easing the global imbalance.”
The major emerging markets of China, India and Russia continued to see rapid growth, the study said. In China, consumer spending rose at a frenzied pace, making it the third-largest retail market in the world. India attracted attention, but government restrictions stood in the way of global retailers getting a foothold in the burgeoning market.
A new customer is emerging, Kalish said, who is price- and quality-conscious, lacks loyalty to brands and stores and does not consider shopping to be fun. “They seek out the best price rather than the best shopping experience,” he said.
Kohl’s, one of the 50 fastest-growing retailers from 2000 to 2005, responded to these issues by selling sought-after brands, differentiating its product assortments and improving the department store experience by building stores with wide aisles to accommodate shopping carts, Kalish said.
The new customer will have complete information about any product he or she wishes to buy. “Google has leveled the playing field by greatly increasing the transparency of the marketplace,” Kalish said. “The fear is that the Internet will turn branded products into commodities.”
Richard Fenker, founder of Prediction Analytics, addressed these concerns during “Multi-Channel Retailing: Synergy or Cannibalization?” Cultivating Internet shoppers is worth the trouble for traditional stores or catalogues, Fenker said. Multichannel shoppers — those who shop in brick-and-mortar stores, through catalogues and online — spend almost 30 percent more than single-channel shoppers, he noted.
Customers who order online and pick up the items in a store increase their purchases by 58 percent, Fenker said. To get optimum results from all three channels, stores must be deployed judiciously. Catalogue firms considering opening a store should be aware that “some shopping experiences don’t enhance the catalogue,” Fenker said. “The Williams-Sonoma store experience enhances the catalogue and Internet, but a dollar store doesn’t enhance the experience. Overall sales are not growing much. Most of the growth is coming from the Internet.”