The 2013/01/21 at 09:10
There is no end to the planet’s greed: consumption is on a while the world’s retail champions witness their shares of the cake growing each year. According to the sixteenth edition of Deloitte’s survey on Global Powers of Retail 2013, the turnover of the 250 main global retail groups rose by 5.1 % in 2011 to four trillion (or (four-billion billion) euros. Finally, the slowdown of the global economy, and the Eurozone debt crisis in particular, has had little impact on the planet’s consumption. For as the Deloitte survey indicates, the trend towards the globalisation of retail groups ultimately contributes to making up for the declines observed in certain global regions. As well as feeding the growth of this type of distribution.
Groups are focusing their expansion on the growth of middle classes, young and urban populations, and ballooning direct investments… all factors contributing to the soar of mass retailing in countries where it has been in a minority position until now. “On big emerging markets such as China, we estimate that at least 70 million new consumers will join the global middle class every year, in other words 500 million new consumers by 2020,” specifies Stéphane Rimbeuf, Partner in charge of the Consumer Business industry for Deloitte in France. In the forefront of those benefiting from this take-off are groups originating from markets in Africa, the Middle East, Latin America, as well as Asia-Pacific (excluding Japan). In this way, out of the thirteen new recruits in this year’s ranking, nine are from emerging countries, more specifically, the Asian-Pacific region. In addition, amongst the fifty global groups to grow the most vigorously – 20 % or more –, twenty-four originate from emerging countries and all demonstrate dynamism four times stronger than that of other groups in the ranking.
Diversification and concentration
Aware of the opportunities offered by these new markets, groups bringing medium and large supermarkets to the public are continuing their globalisation. While in 2000, they were present in an average of only five countries, mass retailers cover an average of nine countries today. Indeed, almost 24 % of their turnover is generated outside of their country of origin, compared to 13 % at the start of the century. “For many of the main global retailers, global expansion remains an engine of growth opportunities that can compensate for weak growth or stagnation in domestic markets,” confirms Stéphane Rimbeuf. Attesting to this “compensation”, the quest for new markets by major Western groups is intensifying: 32 of the forty groups investing overseas in 2011 have their head office in a developed country. This expansion also operates on the basis of takeovers leading to a concentration of activity on major brands. The most striking example is undoubtedly the takeover of the South African Massmart by the American Wal-Mart, the latter revelling all the more at its position at the head of the ranking as it now concentrates 10 % of total turnover. Nonetheless, in certain regions of the world, such as Africa and the Middle East, franchises and licence grants are also vectors of expansion.
The survey also shows that while US distributors are continuing to branch out internationally, they are not straying far from their initial markets: Canada, Mexico and Puerto Rico are the new targets of these groups. As a result, their overseas turnovers remain proportionally lower, at 15 %, compared with the performance of European groups that achieve 38 % of the value of their sales outside their own borders. Observing that group strategy today focuses more on urban centres than on specific countries, the Deloitte survey insists on identifying the more discreet cities that harbour growth opportunities. Asia is top of the pops with Chongqing, China’s most populated city, Ho Chi Minh City (Vietnam), Jakarta (Indonesia), Kolkata (India) and Manila (Philippines). Next comes Africa, with Lagos (Nigeria) and Nairobi (Kenya), tying with Latin America, with Lima (Peru) and Bogota (Colombia), followed up by Yekaterinburg (Russia). This is a list set to become a roadmap for major global brands.