IGD: Tesco to lead growth
Tesco is forecast to grow faster than its three main global rivals with a compound annual growth rate (CAGR) of 6.8% between 2011 and 2015, according to new research from IGD.
Top four global retailers – net turnover in € million and at constant exchange rates 2012 -2015
|
Retailer |
2011 |
2012 |
2013 |
2014 |
2015 |
CAGR |
| Tesco plc |
75,538 |
79,776 |
85,915 |
91,776 |
98,292 |
6.80% |
| Metro Group |
66,659 |
68,672 |
72,610 |
76,607 |
81,118 |
5.03% |
| Wal-Mart Stores |
320,015 |
335,946 |
352,049 |
369,456 |
386,721 |
4.85% |
| Carrefour Group * |
113,591 |
115,574 |
120,790 |
127,696 |
133,984 |
4.21% |
Although Tesco is set to be the fastest growing of the global top four, Wal-Mmart will still be the world’s largest retailer with sales of €386,721m by 2015, said researchers. This is nearly triple the value of Carrefour’s sales of €133,984m over the same period, while Tesco’s turnover will be €98,292m and Metro’s €81,118m.
Joanne Denney-Finch, chief executive, IGD, said: “The key to growth for these global retailers will be presence in the right markets at the right time. The domestic markets remain critical for Carrefour, Metro, Tesco and Wal-Mart, but they are also increasingly relying on emerging markets to sustain strong growth.
“International sales will be driven by a focus on emerging markets, such as China, Latin America, Turkey and Indonesia. The top four global retailers are forecast to achieve double-digit growth in many of these fast developing regions over the next three years.”
Tesco to grow fastest as international leads the way
With annual growth of 6.8% between 2011 and 2015, Tesco is set to achieve the strongest growth of the global grocery top four, said the IGD. Domestic growth will be supported by its renewed focus on quality, service, range and price to improve the customers’ in-store experience.
Tesco’s international markets, particularly China, Turkey and India, will be a key element in driving its long-term growth and returns. The company will try to replicate its successful concepts in the UK, such as Express stores and Clubcard rewards scheme, in other countries, said researchers.
Walmart has strong international prospects
Wal-Mart, with a CAGR of 4.85%, will deliver over half its sales growth outside the US, as Latin America and Africa rise up the list of priorities, said the IGD. China will also be an important growth area. The company will continue to develop its global e-commerce strategy, which includes traditional online retailing, as well as mobile and social commerce.
Its new global consumer insights team is also focusing on understanding its shoppers in greater detail, with the aim of driving stronger loyalty.
Metro’s international operations also key to delivering growth
IGD forecasts CAGR of 5.0% per year for Metro between 2011 and 2015. However, as domestic performance is only set to increase by just 1.0% unlocking the international potential will be crucial to delivering this growth, said researchers.
One of the group’s strategies is to increase focus on its cash and carry model. It has developed a wholesaling operation to supply independent store owners in a number of international markets such as Bulgaria, Poland, Romania and Ukraine and will probably do so in Russia and other markets, tipped the IGD. Metro has also announced it will open more stores in Indonesia.
Carrefour’s new CEO
Georges Plassat will take the helm of a business determined to support domestic growth with a greater focus on price, according to the IGD. Management has put the wider roll-out of its Planet hypermarkets on hold to re-assess the costs of remodelling these stores, but revitalising the performance of this format will remain a top priority for the incoming CEO, said researchers.
Despite the sluggish situation in the southern European markets, international sales will be driven by better performances in Latin America and China. In 2012, Carrefour will cut its capital expenditure by around 30% compared to last year, but spending levels will remain unchanged in emerging markets such as China, Brazil and Indonesia. International operations will help to deliver CAGR of 4.2% between 2011 and 2015, forecasts the IGD.
* This figure excludes VAT and the DIA discount chain (€10,254m in 2011) but includes IGD’s estimated sales of Carrefour’s partners and franchise operations. Only 37% of Carrefour stores are company operated with the majority of the convenience and supermarket estates under franchise. Excluding franchise operations, Carrefour reported group consolidated sales excluding VAT of €81,271m in 2011.
