global powers of retailing 2013 retail beyond ira kalish deloitte services lp january 14, 2013
TRANSCRIPT
Global Powers of Retailing 2013
Retail Beyond
Ira Kalish
Deloitte Services LP
January 14, 2013
What to expect in 2013
2
• Europe will emerge from recession, the euro will survive
• The US will solve its problems (sort of) and grow faster
• China will rebound and tiptoe toward reform
• Japan will embark on a radically new path
• India will engage in further reforms
• Brazil will return to normal growth
• Other emerging markets will grow rapidly
Europe
3
• Recession continues
‒Fiscal tightening
‒Troubled credit markets
‒Perceived currency risk
‒Low business confidence
Eurozone Economic Indicators% change quarter to quarter, annual rate
Source: Institute for International Finance
Europe
4
• ECB provides a credible backstop
‒Offers unlimited support
‒Bond yields decline
‒Markets rebuild confidence in euro
Yield on 10 year bond
Source: Capital Economics
Europe
5
• Small signs of progress
‒Risk spreads decline
‒Capital flight reverses
‒Bank deposits stabilize
‒Business confidence grows
‒Competitiveness improves
European Bank Deposits% change year ago
Source: Capital Economics
Europe
6
• Consumer outlook modest at best
‒High unemployment
‒Declining real wages
‒Weak confidence
‒Higher taxes
‒Focus on exports
Source: Capital Economics
Bank lending to households% change year to year
United States
7
• Surprisingly strong economy
‒Aggressive monetary policy
‒No fiscal policy
Source: Institute for International Finance
United States
8
• Fiscal cliff averted
‒Bush-era tax rates remain for most
‒Upper income households taxes rise
‒Payroll tax rises
United States
9
• Debt ceiling debacle looms
‒Republicans want spending cuts
‒Obama wants clean bill
‒Obama could simply issue debt
‒Is the Republican threat credible?
United States fiscal situation
10
Federal government spending and revenueBillions $US annual rate
United States
11
• Positive signs
‒Modest job growth
‒Modest real income gains
‒Major housing rebound
‒Improved credit markets
Source: Institute for International Finance
United States
12
• Continued weakness
‒Manufacturing weakened in late 2012
‒Capital spending declined
‒But new orders suggest a turnaround
New orders: non-defense, non-aircraft capital goods
United States
13
• Consumer situation
‒Consumer balance sheets improved
‒Cash flow better after paying down debts
‒Very strong spending on automobiles
‒Retail grows modestly
Source: Institute for International Finance
China
14
• Short term revival
‒Stimulus appears to have worked
‒Loosened monetary policy
‒Growth from investmentExports by destination
US$, % chg year over year
China
15
• Longer term challenges
‒Moving to the next stage of growth
‒Shifting from investment to consumption
‒Dealing with demographics
‒Reforming without offense
China
16
• Influences on retailing
‒Rising wages
‒Shift to higher skilled workforce
‒Investment in second tier cities
‒Continued income disparity
Japan
17
• The situation until now
‒Deflation
‒Weak export demand
‒Declining competitiveness
‒Weak consumer demand
‒Poor monetary stimulus
‒Dysfunctional politics
Source: US Federal Reserve
Japan
18
• A new age dawns
‒New Prime Minister Shinzo Abe assumes office
‒Promises massive fiscal stimulus
‒Promises more aggressive central bank
‒Already yen has fallen
Japan
19
• The uncertain outlook
‒Japan faces increased competition from China, Korea
‒Japan has daunting demographics and no immigration
‒Economy requires numerous reforms
‒Much will depend on new policies
The other BRICs
20
• India: greater hope for reform
• Brazil: stimulus will result in faster growth in 2013
• Russia: moderate growth, more energy investment
The next tier of emerging markets
21
• Countries to watch:
‒Bangladesh
‒Colombia
‒Indonesia
‒Mexico
‒Nigeria
‒Peru
‒Philippines
‒Turkey
‒Vietnam
Big issues influencing retailing
22
• Energy
• Demographics
• Fiscal problems
• The role of women
• The internet
Top 250 retailers
Top 10 retailers worldwide
24
Retail sales rank
(FY11)
Name of company Country of origin
2011 retail revenue(US$mil)
2011 Group revenue (US$mil)
2011 group net income
(US$mil)
2006-2011 retail revenue CAGR*
1 Wal-Mart Stores, Inc. U.S. 446,950 446,950 16,387 5.1%
2 Carrefour S.A. France 113,197 115,277 563 0.9%
3 Tesco PLC U.K. 101,574 103,244 4,502 8.3%
4 Metro AG Germany 92,905 92,905 1,032 2.2%
5 The Kroger Co. U.S. 90,374 90,374 596 6.5%
6Costco Wholesale Corporation
U.S. 88,915 88,915 1,542 8.1%
7Schwarz Unternehmens Treuhand KG
Germany 87,841 87,841 n/a 8.0%
8Aldi Einkauf GmbH & Co. oHG
Germany 73,375e 73,375e n/a 5.5%
9 Walgreen Co. U.S. 72,184 72,184 2,714 8.8%
10 The Home Depot, Inc. U.S. 70,395 70,395 3,883 -2.3%
e = estimate CAGR = compound annual growth rate
Share of Top 250 retailers by region/country, 2011
25
Share of Top 250 retail revenue by region/country, 2011
26
Top 10 North American retailers
27
N. America rank
Top 250 rank Company Country of origin Retail revenue (US$ millions)
1 1 Wal-Mart U.S. $446,950
2 5 Kroger U.S. $90,374
3 6 Costco U.S. $88,915
4 9 Walgreens U.S. $72,184
5 10 Home Depot U.S. $70,395
6 11 Target U.S. $68,466
7 14 CVS Caremark U.S. $59,599
8 20 Best Buy U.S. $50,705
9 21 Lowe's U.S. $50,208
10 23 Amazon.com U.S. $46,491
Top 10 European retailers
28
European rank
Top 250 rank Company Country of origin Retail revenue (US$ millions)
1 2 Carrefour France $113,197
2 3 Tesco U.K. $101,574
3 4 Metro Germany $92,905
4 7 Schwarz Germany $87,841
5 8 Aldi Germany $73,375e
6 12 Auchan France $60,515
7 15 Edeka Germany $59,460
8 19 Rewe Combine Germany $51,331
9 22 Casino France $47,107e
10 24 E. Leclerc France $45,407e
e = estimate
Top 10 Asia Pacific retailers
29
Asia Pacific rank
Top 250 rank Company Country of origin Retail revenue(US$ millions)
1 13 Aeon Japan $60,158
2 16 Seven & i Japan $57,966
3 17 Woolworths Australia $54,614
4 18 Wesfarmers Australia $52,208
5 40 Yamada Denki Japan $23,483
6 48 Lotte Shopping S. Korea $19,077
7 50 AS Watson Hong Kong $18,444
8 59 Bailian China $15,930e
9 62 Isetan Mitsukoshi Japan $15,373
10 65 GOME China $14,923e
e = estimate
Top 10 Latin America retailers
30
Lat. America
rank
Top 250 rank Company Country of origin Retail revenue (US$ millions)
1 34 Grupo Pão de Açúcar Brazil $27,988
2 63 Cencosud Chile $14,967
3 111 Falabella Chile $9,145e
4 131 Soriana Mexico $7,945
5 153 Lojas Americanas Brazil $6,128
6 156 FEMSA Comercio Mexico $5,992
7 191 Comercial Mexicana Mexico $4,727e
8 196 Comercial Chedraui Mexico $4,602
9 215 El Puerto de Liverpool Mexico $4,232
10 217 Coppel Mexico $4,220e
e = estimate
Top Africa/Middle East retailers
31
Africa/ME rank
Top 250 rank Company Country of origin Retail revenue (US$ millions)
1 93 Shoprite Holdings S. Africa $10,717
2 133Steinhoff International Holdings
S. Africa $7,761
3 135 Pick n Pay Stores S. Africa $7,560
4 165 SPAR Group S. Africa $5,607
5 185 BİM Birleşik Mağazalar Turkey $4,907
6 198 Landmark Group UAE $4,518
7 213Emke Group/Lulu Group International
UAE $4,250e
e = estimate
Top 250 new market entries by sub-region, 2011
32
*Includes franchised, licensed, and other partnership or distribution arrangementsExcludes companies entering a new country through e-commerce or other non-store methods, except for companies that operate primarily as non-store retailers Source: published company data
This is the big story
Top 10 Fast-Moving Consumer Goods retailers, 2011
33
Sector rank
Top 250 rank
Company Country of origin Retail revenue (US$ millions)
1 1 Wal-Mart U.S. $446,950 2 2 Carrefour France $113,197
3 3 Tesco U.K. $101,574
4 5 Kroger U.S. $90,374 5 6 Costco U.S. $88,915
6 7 Schwarz Germany $87,841
7 8 Aldi Germany $73,375
8 9 Walgreens U.S. $72,184
9 12 Auchan France $60,515
10 13 Aeon Japan $60,158
Top 10 Fashion Goods retailers, 2011
34
Sector rank
Top 250 rank
Company Country of origin Retail revenue(US$ millions)
1 37 Macy's U.S. $26,405 2 42 TJX U.S. $23,191
3 45 LVMH France $20,760
4 47 Inditex Spain $19,157 5 49 Kohl's U.S. $18,804
6 53 J. C. Penney U.S. $17,260
7 55 H & M Sweden $16,974
8 62 Isetan Mitsukoshi Holdings Japan $15,373
9 68 Gap U.S. $14,549
10 95 Nordstrom U.S. $10,497
Top 10 Hardlines & Leisure Goods retailers, 2011
35
Sector rank
Top 250 rank
Company Country of origin
Retail sales (US$ millions)
1 10 Home Depot U.S. $70,395 2 20 Best Buy U.S. $50,705
3 21 Lowe's U.S. $50,208
4 23 Amazon.com U.S. $46,491 5 30 IKEA Netherlands $34,314
6 40 Yamada Denki Japan $23,483
7 52 Kingfisher U.K. $17,354
8 57 Groupe Adeo France $16,157
9 64 Staples U.S. $14,966
10 65 GOME China $14,923
Top 10 Diversified retailers, 2011
36
Sector rank
Top 250 rank
Company Country of origin
Retail sales (US$ millions)
1 4 Metro Germany $92,905 2 11 Target U.S. $68,466
3 27 Sears Holdings U.S. $41,567
4 48 Lotte Shopping S. Korea $19,077 5 54 El Corte Inglés Spain $17,143
6 60 Marks & Spencer U.K. $15,863
7 74 Otto Group Germany $13,903
8 92 J. Front Retailing Japan $10,843
9 102 Beisia Group Japan $9,840
10 103 Liberty Interactive U.S. $9,616
Top 30 retailers by Q ratio
Name of company Country Q ratio
BİM Birleşik Mağazalar A.Ş. Turkey 6.49
CP ALL Public Company Limited
Thailand 6.47
H & M Hennes & Mauritz AB Sweden 5.5
Inditex, S.A. Spain 5.13
Coach, Inc. U.S. 4.98
Apple Inc. / Apple Stores U.S. 4.26
Dairy Farm International Holdings Limited
Hong Kong SAR
4.15
Amazon.com, Inc. U.S. 4.03
Belle International Holdings Limited
Hong Kong SAR
3.98
Whole Foods Market, Inc. U.S. 3.91
Tractor Supply Company U.S. 3.85
Dollar Tree, Inc. U.S. 3.78
The TJX Companies, Inc. U.S. 3.73
Ross Stores, Inc. U.S. 3.64
Fast Retailing Co., Ltd. Japan 3.41
Name of company Country Q ratio
Next plc U.K. 3.06
The Sherwin-Williams Company U.S. 2.98
PetSmart, Inc. U.S. 2.86
Shoprite Holdings Ltd. S. Africa 2.71
Family Dollar Stores, Inc. U.S. 2.56
Open Joint Stock Company "Magnit"
Russia 2.43
AutoZone, Inc. U.S. 2.39
Compagnie Financière Richemont SA
Switzerland
2.39
The Home Depot, Inc. U.S. 2.31
Bed Bath and Beyond Inc. U.S. 2.25
The Gap, Inc. U.S. 2.17
Limited Brands, Inc. U.S. 2.17
President Chain Store Corp. Taiwan 2.09
El Puerto de Liverpool, S.A.B. de C.V.
Mexico 2.07
Williams-Sonoma, Inc. U.S. 2.0637
Composite Q ratio by geography
38
By country Q ratio
Hong Kong 1.65
U.S. 1.59
Mexico 1.30
Russia 1.19
South Africa .88
Canada .79
U.K. .62
France .60
Japan .40
Germany .21
By region Q ratio
Africa/ ME 1.11
Asia Pac less Japan
1.08
Latin America 1.06
Europe .82
Emerging markets 1.14
Developed markets 1.11
Composite Q ratio by format and product
39
By format Q ratio
Apparel/Footwear 3.05
Electronic specialty 2.65
Discount store 1.61
Home improvement 1.47
Non-store 1.46
Other specialty 1.15
Discount dept. store .92
Supermarket .84
Drugstore/pharm .83
Hypermarket .63
Convenience/Forecourt .60
Department store . 58
Electronic less Apple .42
By product Q ratio
Hardlines 1.85
Fashion 1.69
Hardlines less Apple 1.10
FMCG .76
Diversified .55
Concluding thoughts
“Economic forecasting was invented to make astrology look respectable.”--John Kenneth Galbraith
“I know I know nothing, but at least I know that.”
-- Willem Buiter, Citibank Chief Economist
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