Deloitte’s 18th annual Global Powers of Retailing report explores innovative trends in the sector
New York, 12 January 2015 – The top 2501 global retailers generated revenue of US$4.4 trillion in fiscal year 2013, each with an average size of more than US$17.4 billion, according to the 2015 Global Powers of Retailing, Embracing Innovation report from Deloitte Touche Tohmatsu Limited (DTTL), in conjunction with STORES Media. This year’s report explores innovative trends in retail, forecasts for 2015, as well as the strategies retailers are utilizing to address the disruptive changes impacting the sector.
The 250 largest retailers around the world are analyzed based on their financial performance, geographic region, product sector, and e-commerce activity. Revenue growth for the top 250 retailers, which began declining in 2011, continued to slow in fiscal year 2013. According to the report, sales-weighted, currency-adjusted retail revenue was 4.1 percent for the top 250, following a 4.9 percent gain in fiscal year 2012. While growth continued to decline, nearly 80 percent of the top 250 (199 companies) posted an increase in retail revenue in fiscal year 2013.
“The sluggish global economy in 2014 left many consumers financially constrained and retail sales under pressure. Thus, the prosperity of the global retail sector in 2015 will very much depend on the economic stability of several of the largest economies. China, the Eurozone as well as a few key emerging economies had a particularly tough 2014. Comparatively, the US and British economies continue to do well, with indicators pointing to the likelihood of strong growth in 2015 and possibly beyond,” said Dr. Ira Kalish, DTTL Chief Global Economist.
Top retail trends in 2015
- Travel retailing – International tourism is set to continue to rise above expectations despite continuing global geopolitical and economic challenges. The expanding middle classes of emerging markets are traveling to the world’s capitals and boosting retail sales. For example, over half of France’s 16 billion Euros luxury industry depends on tourists2. In 2015, retailers are expected to increasingly cater to high-spending travelers, especially emerging market tourists to drive growth.
- Mobile retailing – Mobile retailing is expected to continue to grow aggressively. Sixty-five percent of the global population will be using a mobile phone by 2015 and an estimated 83 percent of internet usage will be through handheld devices3. Retailers will need to respond by offering free in-store Wi-Fi and mobile-friendly retail websites optimized for different kinds of personal devices. Privacy and security will become increasingly important as trust, transparency, and protecting customer information will be critical in retaining loyalty as mobile retailing becomes the norm.
- Faster retailing – Speed continues to remain an important trend in retail. This includes: “fast fashion” (getting runway styles to the stores as soon as possible); limited-time-only products and flash sales to drive urgency and immediate purchase; pop-up establishments to quickly get products and services to market and build buzz; and self-service check-out and kiosks to reduce or eliminate waiting. In 2015, retailing is forecast to get even faster to meet consumers’ desires. Millennials will be driving much of this as they are the largest generation, with a lot of spending power, and carry a lot of influence. They prefer fast response and immediate gratification, and retailers will cater to that.
- Experience retailing – Retailing is no longer just about the product, but the experience. Retailers will continue to explore innovative ways to enhance the buying experience for their customers through social media campaigns, festivals, fashion shows, and interactive displays.
- Innovative retailing – The retail industry will continue to be disrupted by new technologies and innovative competition. More retailers are likely to adopt innovative practices, embrace technology, and use it in creative ways.
Vicky Eng, DTTL Global Sector Leader, Retail: “The retail sector is going through a significant period of change. The speed of innovation and the disruption being felt across the industry will continue, as the demands of customers continue to increase. To succeed in this environment, retailers will need to respond quickly to threats and opportunities ensuring they are quick to implement innovations of their own. This will require a connecting strategy, capabilities, and specific initiatives, guided by the insights provided by market data.”
Full details about the report are available on Deloitte's website at: www.deloitte.com/globalpowersretail.
1The analysis is based on publicly available data for fiscal year 2013 (encompassing companies’ fiscal years ended through June 2014).
2 Inside France’s €16.8 Billion Luxury Goods Market, Luxury Society, 13 February 2014. http://luxurysociety.com/articles/2014/02/inside-frances-168-billion-luxury-goods-market
3 Two Billion Smartphone Users By 2015: 83% of Internet Usage From Mobiles, DazeInfo, 23 January 2014. http://www.dazeinfo.com/2014/01/23/smartphone-users-growth-mobile-internet-2014-2017/
Notes to editors:
Top 10 global retailers, fiscal 2013
|Top 10 retailers
|Name of company||Country of origin
||2013 Retail revenue (US $mil)
||Top 10 retailers
|1||Wal-Mart Stores, Inc.
|2||Costco Wholesale Corporation
|4||Schwarz Unternehmens Treuhand KG||Germany||98,662||e|
|6||The Kroger Co.||U.S.||98,375|
|8||Aldi Einkauf GmbH & Co. oHG||Germany||81,090||e|
|9||The Home Depot, Inc.||U.S.||78,812|
|Top 10 share of Top 250 retail revenue||29.7%|
|*Compound annual growth rate|
|1Metro changed its fiscal year from end of December to end of September. Fiscal 2013 results reported here include the 9 months ended 30 September 2013 plus the quarter ended 31 December 2013 to create a 12-month period equilvalent to prior years.|
|2Sales-weighted, currency-adjusted composites|
|e = estimate|
|n/a = not available|
|Sources: Published company data and Planet Retail|
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.
Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. With a globally connected network of member firms in more than 150 countries, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most complex business challenges. Deloitte has in the region of 200,000 professionals, all committed to becoming the standard of excellence.