Third Australian retailer breaks into Deloitte Global Powers of Retailing Top 250

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Third Australian retailer breaks into Deloitte Global Powers of Retailing Top 250

  • JB Hi-Fi’s inaugural entry into Top 250 brings number of Australian retailers listed to three
  • Wesfarmers and Woolworths maintain top 25 global retailers’ placings
  • 38 Top 250 global retailers now operate in Australia
  • 2018 could be a pivotal year for many Australian retailers.

23 January 2018: For the first time, Australia is represented by three retailers in the Deloitte Global Powers of Retailing report. Now in its 21st year, this annual report identifies the 250 largest retailers globally by revenue and examines current global trends and economic prospects in retail.

Following JB Hi-Fi’s acquisition of electronics chain, The Good Guys in November 2016 and a consistent year-on-year comparative sales growth, it makes the Top 250, entering at 218. Top 250 Australian stalwarts, Wesfarmers and Woolworths maintain their top 25 global retailers’ placings at 21st and 23rd, respectively (compared to 21st and 24th last year).

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 amongst retailers also continued to increase,” says 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.”

Over the past 12 months, new players outside of the Top 250 have entered Australia – and this trend looks set to continue, according to White.

“JD Sports, the UK sports-fashion retailer, now has five stores in Australia. Also, well-established international players in the luxury retail market, such as Swarovski and Tiffany & Co, have opened new stores, expanded existing footprints and introduced new brands to our market. We also saw the French-owned retailer Décathlon open its first bricks-and-mortar store in Australia in 2017 and Amazon’s long-anticpiated arrival to our shores,” he says.

White also expects a continuation of the strong interest from international retailers for acquisition opportunities in Australia. With the continued competitive pressures, further consolidation can be expected in 2018, particularly in the apparel sector.

Top 10 global retailers by revenue

Top 10 global retailers by revenue
Click image to enlarge

The calm before the storm

Whilst the global retail environment appears to be relatively stable, Australia is facing a number of potential disruptors which could have a significant impact on the retail landscape. White highlights three key disruptors to look out for:

  • Amazon – Whilst the online retailer’s initial launch of its on-shore business didn’t have the big bang effect some commentators were expecting, White says underestimate Amazon at your 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 the discount supermarket operator, owned by the 4th largest retailer in the world, The Schwarz Group, is preparing to enter the Australia market following recent land purchases, securing of trade markets and talent acquisition. White says: “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. 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. Whilst they are currently only sourcing and selling highly sought after Australian products to Chinese consumers, in 2017 Alibaba opened its Australian headquarters in Melbourne, is expected to follow suit shortly, and Vipshop Holdings ( opened its new distribution centre in Sydney as it seeks to partner with more Australian retailers. White comments: “These fast-growing Chinese retailers and e-commerce platform providers are starting to make a significant impact on the global retail market. This provides Australian retailers with a huge opportunity to take advantage of high Chinese demand for Australian products.”

“With only 15% of the Top 250 retailers globally operating in the Australian market, 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,” White adds.

Transformative change, reinvigorated commerce

Global Powers of Retailing 2018 also discusses how the rules of retailing are being rewritten in this time of transformative change. Innovation, collaboration, consolidation, integration, and automation will likely be required to reinvigorate commerce, profoundly impacting the way retailers do business now, and in the future.

The four trends identified in the report are:

  • Building top-notch digital capabilities. Retailers across the globe are rapidly adapting to the fact that, from the consumer perspective, shopping is not about bricks versus clicks or one channel versus another. Instead, consumers are channel-agnostic
  • Combining bricks and clicks makes up for lost time. Many players that may have initially been on the sidelines and failing to keep up with digital trends, are now making up for lost time in a big way
  • Creating unique and compelling in-store experiences. Physical retail stores are not going away; 90% of worldwide retail sales are still done in physical stores. But to compete with the convenience and endless aisle assortment offered online, meaningful customer experiences and brand engagement is crucial
  • Reinventing retail with the latest technologies. The Internet of Things, artificial intelligence, augmented and virtual reality, and robots should be on every retailer’s radar.

“It is a transformative time in retail. The shopper is clearly in the driver’s seat, enabled by technology to remain constantly connected and more empowered than ever before to drive changes in shopping behavior,” says White. “Across the retail industry, disruption of traditional business models has given way to unprecedented and transformative change – change required online and offline to better serve more demanding shoppers and redefining customer experience.”

Global highlights

  • The Top 250 global retailers generated aggregated revenues of US$4.41 trillion in FY2016 (versus US$4.31 trillion in FY2015). To earn a spot on the Top 250 list required a minimum FY2016 revenue of US$3.6 billion
  • Retail revenue increased for 181 of the world’s 250 largest retailers, resulting in a currency-adjusted composite growth rate of 4.1% (compared to 5.2% in FY2015)
  • 167 of the Top 250 retailers operated outside their home country borders. On average, they had retail operations in more than 10 countries ansd derived 22.5% of their composite retail revenue from foreign operations
  • The 50 fastest-growing retailers grew revenue, on average, four times faster than the Top 250 group as a whole, recording a 20.9% composite compound annual growth rate from FY2011 to FY2016.

Notes to editors

Media Contact:

Céline Gordine-Wright
Corporate Affairs & Communications
M: +61 449 554 077
T: +61 3 9671 8285

Top 250 global retailers currently operating in Australia:

About the Global Powers of Retailing 2018 report

The Global Powers of Retailing 2018 report identifies the 250 largest retailers around the world based on publicly available data for FY2016 (fiscal years ended through June 2017), and analyses their performance across geographies and product sectors. It also provides a global economic outlook and looks at the 50 fastest-growing retailers and new entrants to the Top 250.

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