Kantar Retail’s Market Insights team recently updated all forecasts on global retail — a highly collaborative process that gains particular momentum the first half of the year as retailers report full-year performance for the prior fiscal period. The updated reports rank retailers by Kantar’s 2013 sales estimates, and include growth projections for the next five years. Highlights from this cycle’s updated Top 50 Global ranking include some key landscape shifts, and point to several important predictions Kantar foresees over the next few years.
Competition in the global retail landscape grows fierce, and Kantar continues to see the impact of nontraditional channels making inroads into grocery and other key categories. Top global players are making critical investments and decisions to win.
Retailers headquartered in the United States made a few significant upward moves in 2013, jockeying for position in the Top 10. Wal-Mart Stores still retains the No. 1 spot by a long shot, yet it will be interesting to watch how this retailer’s future growth and sales mix take shape with current investments in global markets, smaller formats, in-store upgrades and its online business.
Costco notably inches upward to the No. 3 spot, ousting U.K.-based Tesco. Costco, a consistently strong performer, is focusing much of its ongoing expansion strategy in the international space. New European markets are on the horizon for this retailer; and while entry into France has been challenging, operations in Spain are set to take off at the end of the year.
Kroger makes the Top 5 this year, moving to the No. 5 spot. Kroger is the only retailer in the Top 10 without an international presence; however, this grocer certainly has the strategy and resources toward expanding its regional reach. Kroger recently announced its acquisition of regional grocer Harris Teeter in a $2.5 billion deal, giving Kroger a 200-plus store count boost in the southeastern region of the United States.
Carrefour holds on to its No. 2 position, and Tesco slips to No. 4. Both retailers pulled out of several international operations over the past year, but each is calibrating its portfolio through diversified formats and new markets. Schwarz Group moves up to the No. 6 spot, as European discounters continue to dominate and evolve.
Target debuts in the Top 10 at No. 10; and while Amazon sits at No. 11, the retailer makes a sizeable jump from its No. 15 spot last year.
Nearly 80% of the Top 50 Global retailers have operations outside of their home market. Two retailers with headquarters in emerging markets are now full members of the Top 50 — Suning from China and X5 from Russia. Suning, an electronics specialist and appliance retailer, has grown sales through strong organic store growth, but is making key strategic decisions to watch. The retailer is making sizeable investments in its e-commerce business and globalization strategy. Kantar anticipates more Top 50 unseating of the primarily American, Japanese and European retailers over the next half decade.
Other key predictions for the next few years include:
► 2013 will be the last year that Wal-Mart is under a “half trillion dollars” in annual retail revenue.
► 2013 will also be the last year that Amazon is ranked outside the “Global Top 10.”
► Kantar anticipates that in 2014 both Kroger and Schwarz Group will join the “$100 billion” club. Only five retailers in history have achieved this milestone — the Metro Group is the only retailer that joined the group and then left.
► Wal-Mart and Amazon will contribute to the highest percentage of sales added in the next five years.
Clients can access Kantar’s new ranking reports for the United States, United Kingdom, Europe and Global at kriq.com.
Ray Gaul is VP research and analytics for Kantar Retail.