What is Retail Globalisation?
More than ever before, a presence in overseas markets must deliver return on investment and retailers must bring a unique competitive advantage to new markets. Increasingly, retail globalisation is about strength in depth rather than breadth.
Who are the main global retailers?
Carrefour, Metro, Tesco and Wal-Mart are widely considered to be the major global retailers. The combined turnover of Carrefour, Metro, Tesco and Wal-Mart is approximately €480 billion in 2006.
Wal-Mart continues to dominate IGD's Grocery Turnover League, reporting sales of nearly $350 billion for 2006 (Fiscal 2007), a sum greater than the combined turnover of the next five retailers in the league - Carrefour, Tesco, Metro Group and Kroger.
IGD’s Grocery Turnover League
| Turnover Rank 2006/07 |
Retailer |
Country of origin |
Net sales 06/07 $m |
Net sales 06/07 domestic currency millions |
Net sales 05/06 domestic currency millions |
% annual change, domestic currency |
| 1 |
Wal-Mart Stores |
US |
$348,650 |
$348,650 |
$312,101 |
11.7% |
| 2 |
Carrefour |
France |
$97,861 |
€77,901 |
€73,060 |
6.6% |
| 3 |
Tesco |
UK |
$78,587 |
£42,642 |
£38,443 |
10.9% |
| 4 |
Metro Group |
Germany |
$75,225 |
€59,882 |
€55,722 |
7.5% |
| 5 |
Kroger |
US |
$66,123 |
$66,123 |
$60,553 |
9.2% |
| Note: Includes world's leading grocery retailers (over $10 billion in consolidated annual net sales ex. VAT) |
Source: IGD Research and estimates
Emerging Market Index
IGD's Emerging Market Index provides a framework for those considering their market investment strategy. By answering some of the most commonly asked questions when considering market entry (e.g. how quickly will the market grow, how saturated is it currently etc), the Index will provide a useful contribution to the business planning process.
IGD’s Emerging Market Index, 2007
| Rank |
Country |
Region |
Score (%) |
| 1 |
China |
Asia Pacific |
79.0 |
| 2 |
India |
Asia Pacific |
77.0 |
| 3 |
Russia |
CEE |
76.0 |
| 4 |
Brazil |
South America |
68.0 |
| 5 |
Turkey |
CEE |
65.5 | |
|
Source: IGD Research |
Evolution of Global Retailing
Retail Globalisation is evolving with a shift in the focus of global retailing from 'flag-planting' to 'targeted expansion' to secure sustainable growth. As part of IGD's Global Retail Outlook Survey in August 2007, senior retailer and supplier executives from 12 countries were asked the question:
How has the pace of retail globalisation changed in the last five years?
|
|
|
Source: IGD Global Retail Outlook Survey, August 2007
|
The results shown above reveal that the majority or respondents believe the pace of retail globalisation has accelerated with only 5% believing it has slowed in the last five years.
Global Retailing Outlook
With the pace of retail globalisation expected to accelerate further, retailers and suppliers will increasingly be expected to demonstrate a wide range of capability in order to succeed. While plenty of opportunities within the global retailing sector remain, success will be determined by businesses that are able to successfully capture these opportunities as well as manage the challenges that arise.
Two key take aways are as follows:
- Health and wellbeing will become a major battleground
66% of respondents to IGD's Global Retail Outlook Survey believe health and wellbeing will be the key consumer issue in the next five years. The pressure to offer a healthy proposition will increase in line with growing media attention and the need to act responsibly towards consumers.
- Rising costs will have to be balanced against the need to innovate
Innovation and differentiation will be one of the most important industry issues to 2012 according to just under 50% of respondents to IGD's Global Retail Outlook Survey. However, with pricing pressures and rising energy/commodity cost also seen as key issues, the challenge for retailers/suppliers will be to manage costs while filling the innovation pipeline.
