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Deloitte’s Global Powers of Retailing 2023 report details retail growth, continued focus on sustainability, and future of the store innovations

Key highlights

  • The Top 250 retailers achieved a total composite retail growth rate of 8.5% in FY2021.
  • The minimum retail revenue to enter the Top 250 is US$45 billion, with average retail revenue at approximately US$22.6 billion.
  • Six Southeast Asian retailers emerged within the Top 250 ranking – comprising two from Indonesia, one from Philippines, two from Thailand, and one from Vietnam.

SINGAPORE, 7 March 2023 – Deloitte Global has released the annual Global Powers of Retailing 2023 report identifying the 250 largest retailers around the world based on publicly available data for FY2021* and analysing their performance across geographies and product sectors. The report zooms in on the Top 250 retailers, looks at the fastest growers and new entrants, investigates the latest trends in sustainability, and provides insights on the future of the store.

In FY2021, the Top 250 retailers achieved a total composite retail growth rate of 8.5%. In comparison, the Top 10 retailers grew by 8.0% on a composite sales-weighted and currency-adjusted basis, a decline from the 12.4% retail growth by the Top 10 in FY2020. The leading global digital retailers benefited from COVID-19 pandemic behavioural shifts, and the retail environment had largely returned to pre-pandemic shopping habits. Attracting customers back to brick-and-mortar locations has become an area of intense investment, while sustainability efforts shifted into new focus areas.

“In a year of strong year-on-year growth in retail revenue across the Top 250, sustainability remains high on the agenda,” says Evan Sheehan, Deloitte Global Retail, Wholesale & Distribution Leader. “Several players are working on the resale of slightly used goods and we see many technology-enabled innovations. Successful retailers combine technology with the human factor to help provide optimal customer experience. Among the Fastest 50, the main drivers of growth were the luxury brands, e-commerce providers, and department stores.”

Retail in Asia Pacific

FY2021 saw a 15.7% share of retail revenue from the 60 Asia Pacific companies in the Top 250. The top growing retail markets in Asia Pacific are South Korea, Japan, and China/Hong Kong SAR, reporting retail revenue growth of 3.9%, 11.1%, and 10.8%, respectively. Within the Southeast Asia region, six retailers – comprising two from Indonesia, one from Philippines, two from Thailand, and one from Vietnam – emerged within the Top 250 ranking.

The strong performance of Asia Pacific’s leading retailers was mainly driven by sales through digital channels and international expansion. Composite compound annual growth rate (CAGR) for companies in the region during the period FY2016-2021 was 6.7%, 3.3 percentage points above the previous year.

Continued focus on sustainability

The last few years have seen a continuing focus on sustainability, with 73% of Consumer industry CXOs having increased investments in sustainability over the last year. Broadly, the focus of retailers’ efforts is shifting into four new areas:

  1. Resale in retail: Fuelled by increasingly conscious consumers and younger generations who prefer sustainable buying options, retailers are entering or expanding into the pre-owned goods market by introducing marketplaces and buy-back options.
  2. Sustainable supply chain: The retail supply chain currently contributes to 25% of greenhouse gas (GHG) emissions globally. This significant contribution points to the need for retailers to embed sustainable initiatives in their supply chain operations. Other major focal points also include the traceability of products, eliminating waste from the value chain and setting science-based targets while monitoring progress.
  3. Technology-enabled sustainable progress: Blockchain and artificial intelligence (AI) have aided sustainability efforts by increasing the level of traceability and transparency across supply chain operations. AI is also used to track products and components through the value chain, design circular products, make forecasting functions more accurate, and cut waste right from the design stage of the product lifecycle.
  4. Regulations and frameworks: Stakeholders are placing retailers under increased scrutiny when it comes to sustainability efforts, making adherence to frameworks, regulations, and accurate reporting critical.

The future of the store

As the post-pandemic world emerges, the integration of technology in the retail industry has become increasingly important in attracting customers back to physical stores and creating immersive shopping experiences. The use of advanced technologies such as virtual and augmented reality, AI, and data analytics helps enable retailers to personalise recommendations, streamline checkout processes, and engage customers. In the new era of retail, the innovative application of technology will be crucial in fostering customer loyalty and driving business success.

“Ultimately, the future of the store is all about being where the consumer is – from the more traditional brick-and-mortar stores to metaverse storefronts and everywhere in between,” comments Pua Wee Meng, Deloitte Southeast Asia’s Consumer Industry Leader. “But retailers looking to incorporate emerging digital technologies into their customer experience will likely need to address both strategic and technical considerations.”

“For example, retailers will need to weigh the benefit of building a custom app against the ease of using a proven, familiar platform. They will also have to contend with an overwhelming number of consumer choices; to make the solution “sticky”, they will need to understand what customers value most about their specific shopping experience, as well as their unmet shopping needs – and then meet both conditions with a simple, appealing experience that could potentially augment the in-person shopping,” continues Wee Meng.

*Methodology: Analysis of financial performance and operations for FY2021 (fiscal years ended between 1 July 2021 to 30 June 2022) using company annual reports, Supermarket News, Forbes America’s largest private companies and other sources.

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June Yeo
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