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Deloitte Global report finds retailers achieve steady growth despite challenging global economy

  • US$4.3 trillion in revenues generated by top 250 global retailers
  • We are now living in the customer-driven economy

Published: 25 January 2017

The top 250 global retailers generated aggregated revenues of US$4.31 trillion in fiscal year 2015, representing composite growth of 5.2 percent, according to the Global Powers of Retailing 2017: The art and science of customers report from Deloitte Global.

“Slow economic growth in major developed economies, high levels of debt in emerging countries, deflation or low inflation in rich countries and a protectionist backlash against globalization were among dynamics which contributed to a challenging economic environment for retailers,” explained Dr. Ira Kalish, Deloitte Global Chief Economist. “And yet people still need to shop, so the industry carries on. In some places and with some cohorts of shoppers, the outlook for retailers is favorable.”

Global Powers of Retailing Top 250

For the third year in a row, revenue growth for the Top 250 apparel and accessories retailers outperformed other product sectors. Historically, this category of retailers has also been the most profitable, and fiscal year 2015 was no exception. However, retailers of fast-moving consumer goods1 (FMCG) are, by far, the largest companies (average retail revenue of nearly US$21.6 billion) as well as the most numerous (133 retailers accounting for just over half of all Top 250 companies and two-thirds of Top 250 revenue).

The level of retail globalization appears to be at the same level as the previous year. Two-thirds of Top 250 retailers operated outside their home country borders and on average, they had retail operations in more than 10 countries and derived nearly one-quarter of their composite retail revenue from foreign operations.

The art and science of customers

Global Powers of Retailing 2017 also discusses the art and science of customer engagement to help retailers design fresh experiences, enabled by the right technology, and strengthen customer loyalty. What was once considered futuristic is now table stakes. Retail innovators know technology is no longer supplemental to the shopping experience, it is fundamental. Technology alone, however, is not enough. Customers are seeking new and surprising products and experiences.

The five trends identified in the report are:

  • Less is more. Customers are defining themselves less by how many things they own and more by how curated their lives are in terms of possessions and experiences.
  • "Following" economy. Customers are seeking experiences and products that reflect the personal brand they promote on social media.
  • "Retailization" of the world. The maker movement, the sharing economy, and other factors have made it increasingly difficult to define what a retailer is and does - non-traditional retailers are developing new business models to serve customer needs, such as subscription services and flash-sales.
  • On-demand shopping and fulfillment. Relevancy will be determined by the ability of retailers to meet the on-demand mindset of the modern customer.
  • Exponential living. Exponential technologies, like artificial intelligence, robotics and virtual reality are changing how we live and how we will shop.

"Over the last 20 years we have seen a seismic shift in retail and the customers that retailers serve" says Vicky Eng, Consumer Business Retail Sector leader, Deloitte Global. "We are living in an era where customers are in the driver's seat more than ever before and they are craving authenticity, newness, convenience, and creativity. We are living in the customer-driven economy."

"In developing economies, where customers are gaining purchasing power, there is a greater willingness to rely on less traditional retail models for more purchases," said David Lung, Deloitte China Consumer Products and Retail Sectors Leader. "In China, as large stores approach the saturation point, a cooling economy and the rapid rise of e-commerce are posing a serious threat to many traditional retailers. A move to fuse online and offline is gaining steam as companies re-evaluate their expansion plans and seek to establish themselves as serious e-commerce contenders. As disruption and alternative business models persist, retailers will need to reinvent themselves. "

¹ Fast-moving consumer goods: Products that are sold quickly and at relatively low cost.

Top 10 retailers, FY2015

FY2015 Retail revenue rank

Company

Country of origin

FY2015 Retail revenue (US$M)

1

Wal-Mart Stores, Inc.

US

482,130

2

Costco Wholesale Corporation

US

116,199

3

The Kroger Co.

US

109,830

4

Schwarz Unternehmenstreuhand KG

Germany

94,448

5

Walgreens Boots Alliance, Inc.
(formerly Walgreen Co.)

US

89,631

6

The Home Depot, Inc.

US

88,519

7

Carrefour S.A.

France

84,856

8

Aldi Einkauf GmbH & Co. oHG

Germany

82,164e

9

Tesco PLC

UK

81,019

10

Amazon.com, Inc.

US

79,268

 

Chinese companies in Top 250, FY15

FY2015 Retail revenue rank

Company

Country of origin

FY2015 Retail revenue (US$M)

36

JD.com, Inc

China

26,991

46

Suning Commerce Group Co., Ltd.

China

21,814

51

A.S. Watson Group

Hong Kong SAR

19,594**

54

China Resources Vanguard Co., Ltd.

China

17,606

69

Gome Home Appliance Group

China

14,038e

85

Dairy Farm International Holdings Limited

Hong Kong SAR

11,137

121

Shanghai Bailian Group Co., Ltd.

China

7,894**

128

Chow Tai Fook Jewellery Group Limited

Hong Kong SAR

7,295**

145

Belle International Holdings Limited

Hong Kong SAR

6,495

146

Yonghui Superstores Co., Ltd.

China

6,469

157

Vipshop Holdings Limited

China

6,084

158

President Chain Store Corp.

Taiwan

6,080e

192

Chongqing Department Store Co., Ltd.

China

4,650

195

Dashang Co., Ltd.

China

4,545

214

Nonggongshang Supermarket (Group) Co. Ltd.

China

4,168e


e = estimate
** Revenue includes wholesale and retail sales

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