Supermarkets are heavyweights

Woolworths and Wesfarmers/Coles supermarkets, continue to be outstanding performers in the annual Deloitte survey of the world’s 250 biggest retailers. The report covering 2013 highlights the performance of a resurgent Wesfarmers/Coles group jumping in the world rankings from 21 to 18 while its competitor Woolies gained one place to be 17.

Performance measures were also heavily slanted Wesfarmers’ way though comparison came off a low base. Revenues in the $US54 billion range pale when compared with the number one retailer in the world Wal-Mart at $446 billion. Carrefour of France was second with $113 billion. Interestingly, while e-commerce accounted for a significant share of total retail revenue the vast majority of the e-50 (42 companies) in this end of the market were multi-channel retailers; only eight were pure or non-store or web-only retailers. Naturally most e-50 retailers were based in the United States, 28, while Europe scored with 17. Only five were emerging-market companies.

 Editor’s Note When South African group Woolworth’s bid for David Jones is concluded it will create the second-largest department store chain in the southern hemisphere and one of the top 10 such retailers in the world. Combined sales would be $5.7 billion from more than 1151 stores in 16 countries, but in the revenue stakes it’s the supermarkets above that rule the world.

Editors’s Note 2

Some facts and figures coming from The Financial Times in London covering Walmart’s growth in the online world:

E-commerce is now Walmart’s fastest growing segment, with revenues shooting up 30 per cent last year and expected to rise just as fast this year. E-commerce sales, at $US10 billion a year globally, look small next to total revenues of half a trillion dollars. But it is an important bright spot at a time when same-store sales in the US have gone flat.

In the US, Walmart.com is the third-largest online retailer (if you assume half its e-commerce sales are in the US), behind Amazon and Apple, according to eMarketer data. Overseas initiatives such as its partnership with China’s Yihaodian and its “click and collect” grocery ordering system at Asda in the UK have fared well.

Walmart says it wants to create an internet company inside the world’s largest retailer. To this end, it has set up an office in Silicon Valley, gone on a hiring spree for engineers and acquired a dozen tech start-ups (it is still in the market for more). Last year, the company invested about $US500 million in its e-commerce segment – 5 per cent of projected capital expenditures.

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