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Despite tough economic conditions, revenues for the world’s 250 largest retailers reached $4.3 trillion in the last fiscal year (June 2012 through June 2013). The average size of the top 250 retailers exceeded $17 billion according to a study by Deloitte.
“The global retail industry got off to a difficult start in the last year,” said Ira Kalish, Chief Global Economist, Deloitte. However, it is encouraging to see that the world’s leading retailers were able to plough on through the difficult period to reap the rewards of increased consumer spend, she added.
This has served to provide a much needed boost to global revenues with nearly 80 percent of the top 250 (199 companies) retailers posting an increase in retail revenue, the report added. Interestingly, for the first time this year’s report shows that some of the top retailers undertook a series of sell-offs in order to remain profitable and ride out the tough trading period,” Kalish added.
Retailers based in emerging markets such as India, Brazil and Russia continued to enjoy strong consumer demand in fiscal year 2012. Emerging market retailers accounted for more than half (26) of the world’s 50 fastest-growing retailers in fiscal year 2012 including all four Russian top 250 companies, six of seven Africa/Middle East retailers, and six of nine based in Latin America.
“Economically, India appears to be on a low growth trajectory largely due to the astronomical growth turning out to be unsustainable, leading to bottlenecks that created inflation. However, as an emerging market, India promises a positive long-term outlook for global as well as Indian retailers. Many reforms pertaining to the retail sector of the country are likely to take a speedy implementation route post the upcoming elections,” added Gaurav Gupta, Senior Director, Deloitte India.
E-commerce accounted for a significant share of total retail revenue for the e-50 in fiscal year 2012 accounting for nearly one-third of company sales, on average (including the pure-play e-retailers). The vast majority of the e-50 (42 companies) in the e-retail ranking are multi-channel retailers; only eight are non-store or web-only retailers. Most e-50 retailers are based in the United States (28) and Europe (17), and only five are emerging-market companies from Brazil and China.
E-commerce activity was also analysed for the top 250 as a whole. Top 250 companies with e-commerce operations generated an average 7.7 percent of their sales online in fiscal year 2012. From a regional perspective, e-commerce sales grew fastest for Asia/Pacific retailers and slowest for North American retailers.
Among product categories, leisure goods retailers derived a large share of revenue from e-commerce operations than did the other sectors an average of nearly 15 per cent. E-commerce penetration was the lowest (1.7per cent) among FMCG retailers.
“The e-commerce landscape, still heavily dominated by regional and local companies, especially in emerging markets, will increasingly include international players as more brands attempt to go global”, said Gaurav Gupta. “But to gain acceptance from foreign consumers, e-retailers will need to localise their offers and their operations- just like their brick and mortar counterparts.”
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