global powers of retailing 2019


Global Powers of Retailing 2019

The global economy is currently at a turning point. Until early 2018, the global economy displayed strong growth. With inflation accelerating in major markets, governments making shifts in monetary and fiscal policies, and most of the emerging markets experiencing significant currency depreciation, the global economy will slow down in the near future. How will these changes impact the retailing industry?

Australian retailers in the Top 250

This year’s report reveals that while the global and local retail environment continues to present challenges, the world’s top 250 retailers collectively still achieved strong growth in FY18, generating US$4.53 trillion in revenues, up 5.7% year-on-year. Three Australian based retailers – Wesfarmers, Woolworths and JB HiFi – all remain in the Top 250. JB HiFi’s ranking has moved up, from 218 to 181 with Wesfarmers and Woolworths maintaining their top 25 placings, at 21 and 22 respectively (Wesfarmers unchanged, Woolworths up one place).

Key takeaways for the Australian market
  • Performance in Australia was strong earlier in 2018 as cheap credit and rising asset prices fuelled confidence to spend, however by year’s end we saw significant declines in household wealth through both falling house prices and share market declines.
  • Retail sales volumes are expected to grow as stronger labour market conditions offset declines in wealth, but the early part of 2019 may be challenging. Consumer spending for the year ahead will be largely driven by wage growth as consumer wealth declines and the willingness to forgo savings for spending diminishes.
  • The apocalyptic impact that some commentators expected Amazon to have on the Australian retail market has not materialised…at least not yet. With the mid-2018 launch of its subscription-based Prime delivery service at more than half the price of its US equivalent, Amazon is bringing its frictionless omni-channel delivery experience to Australian customers.
  • Despite Chinese businesses only commanding 5% of the Top 250 retailers operating in Australia, we expect this will increase over coming years, particularly with the rise of omni-channel marketplaces throughout Asia.
The next wave of growth

Just as 2018 saw several highs and lows for Australian retailers, 2019 is shaping up to be yet another year of disruption. Constant change remains a pervasive influence, but disrupted markets can also create opportunity. We see a number of opportunities for growth for retailers operating in Australia in 2019. These include tapping into the opportunity created by the disruption on our doorstep in Asia, building collaborations and strategic partnerships as well as doing well by doing good.

Global Powers of Retailing 2019

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