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Study: U.S. retailers’ online sales to hit $50 billion by 2020

BY Marianne Wilson

New York — International sales from U.S. online retailers will jump from $11 billion in 2014 to almost $50 billion by 2020, which would make up 16% of the overall U.S. online retail market, according to a new report by OC&C Strategy Consultants.

The OC&C “The Global Retail e-mpire” report, done in collaboration with Google, details the growth opportunity for U.S. online retailers to expand their international presence in order to access new customers and drive revenue. It found that international customers are turning to the U.S. for entertainment, electronics, fashion and general merchandise. Brazil has demonstrated the most growth in international searches for U.S retailers at 425, followed by Australia (39%), Mexico (38%) and Italy (37%).

While international sales for U.S. online retailers will only reach 7% of total volumes this year, OC&C’s analysis suggests that these numbers could more than double within the decade and could reach 16% by 2020.

Leading online retailers, such as eBay and Amazon, have had significant e-commerce market share across the largest international markets over the last several years, and reported that more than 50% of their sales are already coming from overseas.

“It’s not surprising that our analysis suggests that the largest, most popular U.S. retailers have a concentrated presence overseas. What is surprising is that for the first time our research reveals that smaller U.S. online pureplay retailers, such as Etsy and Snapfish, are demonstrating rapid international growth; Etsy has now reached the Top 10 most sought out U.S. retailers based on international searches,” said Rambaut Fairley at OC&C Strategy Consultants.

OC&C’s research has determined that U.S. retailers, unlike many of their overseas peers, are leading the way in successfully internationalizing their e-commerce sites. Forty percent of U.S. ecommerce brands have reported reaching more than 50 countries with their goods and services, and another 40% have designed their websites to specifically target Spanish-speaking and other local language customers.

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Costco opens 2014 with January sales increase

BY CSA STAFF

Costco reported net sales of $8 billion for the four weeks ended Feb. 2, representing an increase of 6% from the similar four-week period last year.

Comparable store sales across Costco’s U.S. store base were up 5%.

For the 22 weeks ended Feb. 2, Costco reported net sales of $46.3 billion, representing a similar increase of 6% versus the year-ago period.

The company plans to release its operating results for the second quarter Thursday, March 6.

Costco currently operates 649 warehouses, including 462 in the United States and Puerto Rico, 87 in Canada, 33 in Mexico, 25 in the United Kingdom, 18 in Japan, 10 in Taiwan, 9 in Korea and 5 in Australia. Costco also operates e-commerce sites in the U.S., Canada, the United Kingdom and Mexico.

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Gains at front end drive Shoppers Drug Mart Q4 results

BY CSA STAFF

Shoppers Drug Mart posted an increase in fourth quarter sales driven by gains at the front end and strength in prescription count growth.

Sales for the quarter were Canadian $2.75 billion, an increase of 0.9% compared with the year-ago period. Same-store sales increased 1.2% during the quarter.

Pharmacy sales were C$1.23 billion in the fourth quarter, an increase of 0.8% compared with the same period of the prior year, as strong growth in the number of prescriptions filled at retail was partially offset by a further reduction in average prescription value, the company stated. On a same-store basis, pharmacy sales increased 0.5%.

During the fourth quarter of 2013, the number of prescriptions dispensed at retail increased 5% compared with the same period of the prior year and was up 4.7% on a same-store basis. Pharmacy volume growth was evident in all regions of the country and remains particularly strong in Ontario, the company noted.

Year-over-year, average prescription value at retail declined a further 3.8% during the fourth quarter of 2013, largely the result of further reductions in generic prescription reimbursement rates because of ongoing drug system reform initiatives in all provincial jurisdictions, along with increasing generic prescription utilization rates.

Front store sales were C$1.517 billion in the fourth quarter, an increase of 1.1% compared with the year-ago period, led by strong growth in cosmetics and food and confection. This is a particularly strong result relative to the marketplace and given that sales of OTC medications declined year-over-year in the absence of a strong cough and cold season compared with the fourth quarter of last year, the company stated. On a same-store basis, front store sales increased 1.7%.

Net earnings, inclusive of transaction-related costs of C$3 million associated with the pending acquisition of the company by Loblaw, were C$169 million in the quarter. Excluding the impact of these costs, adjusted net earnings for the fourth quarter of 2013 were C$172 million compared with net earnings of C$175 million in the same period of the prior year. On a diluted basis, adjusted net earnings per share were 86 Canadian cents in the fourth quarter of 2013 compared with net earnings per share of 85 Canadian cents in the same period of the prior year, an increase of 1.2%.

"We are pleased with our fourth quarter and full year operating and financial results. By any measure, our performance in the fourth quarter of 2013 is a successful conclusion to what has been a very successful year for our company and its shareholders. In what remains a highly competitive and challenging marketplace, it is clear that our value proposition and unwavering commitment to provide the best in patient-care and customer service continues to resonate with patients and customers alike," Domenic Pilla, president and CEO said. "On behalf of our shareholders and the board of directors, I would like to thank our corporate and regional office employees, along with our associates and their teams at store level, for their efforts and contributions to our collective success in 2013."

"While the transaction must still be reviewed and approved by the Competition Bureau, we look forward to the conclusion of this process and the resultant combination of Canada’s leading food and pharmacy retailers," said Pilla, commenting on the pending acquisition of the company by Loblaw.

Fiscal 2013 sales for the 52 weeks totaled C$11.06 billion compared with C$10.78 billion in 2012, an increase of 2.6%. On a same-store basis, sales increased 1.9% in 2013.

Pharmacy sales were C$5.23 billion in 2013 compared with C$5.10 billion in 2012, an increase of 2.5%, as strong growth in the number of prescriptions filled at retail, combined with further sales gains in the company’s MediSystem Technologies business, were partially offset by a further decline in average prescription value. On a same-store basis, pharmacy sales increased 1.3% during the year.

Front store sales were C$5.831 billion in 2013 compared with C$5.681 billion in 2012, an increase of $150 million or 2.6%, with the company posting sales gains in all categories, led by strong growth in cosmetics, OTC medications and food and confection. On a same-store basis, front store sales increased 2.5% in 2013.

Net earnings in 2013 were C$602 million compared with C$606 million in 2012. On a diluted basis, adjusted net earnings per share were C$3.05 in 2013 compared with C$2.97 in 2012, an increase of 2.7%.

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