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in the selling of finished products to end user consumers. Multi-store retail chains in the U.S. are both publicly traded on the stock exchange and privately owned.
Size of the Retail Industry: According to the latest annual report from the U.S. Census Bureau (calendar year 2009), the total amount of sales for the U.S. Retail Industry (including food service and automotive) was $4.13 trillion. This was the 2nd consecutive annual decline for the retail industry, both an effect and cause of the U.S. economic recession overall. Most major multi-store retail chains had sales declines in the first part of 2009, but saw improvements toward the end of that year, and the upward trend has continued into 2011 Growth rate- The retail industry is the second largest industry in the U.S. (responsible for approximately 12% of all US employment) with over $3.8 trillion in sales annually ($4.2 trillion if food sales are included). Although the vast majority of all retail stores in the U.S. (approximately 90%) are single-store businesses, however these single-store businesses account for substantially less than half of all retail sales. Thus the majority of the revenue in the retail industry is generated by companies that run retail "chains". The biggest retailer in the world is Wal-Mart, which generated over $344 billion in revenue in its last fiscal year The Largest Retail Industry : Measured solely by revenue numbers, the U.S. is the undisputed leader of the retail industry. Wal-Mart is not only the largest global retailer, it is also one of the largest companies of any kind in the world. According to Fortune Magazine's 2010 "Global 2000" list, 54 of the largest companies of any type in the world are U.S. based companies with that are solely retail companies or companies with significant retail operations Each country has a retailer that is its biggest and best, and when comparing the biggest and best retail chains from each company, the Global Powers of Retailing list emerges. From the 13th annual ³Global Powers of Retailing´ report compiled by Deloitte Touche Tohmatsu and STORES Magazine, this is the list of the retailers who are leading the way for the retail industry in each of their 32 homelands. The ³Global Powers of Retailing´ list ranks global retailers according to total revenue. In 2010 the list reflects the revenue that was generated in 2009, which was the early part of an intense global retailing recession. Despite that, the changes from the last Global Powers list are surprisingly not all that dramatic. Most of the world¶s largest retailers positioned in the top half of the list moved very little in their rankings, if at all. Wal-Mart is still, by far, the largest retailer in the world. France¶s Carrefour is still #2. Germany¶s Metro AG overtook the United Kingdom¶s Tesco chain and claimed the #3 position on the list. The top retailers in the top countries managed to maintain relative stability on the global retailing stage.
Despite the downturn in the US. and the world in terms of revenue generated. Chile. from health care to immigration to gun control. Also. In 2008 there were 35 big box retailers with 3. The profitable e-commerce market has served as a launch pad for . respectively. and Brazil also had new retail companies assume the position of being their country¶s largest retailer. Big box retail stores account for only a small percentage of the total number of stores in the total 'General Merchandise Stores' sector in the US. and a new largest retailer emerged in that country. This type of E-Commerce has created successful companies such as Amazon. and forced small single-store businesses out of the markets which WalMart enters. economic and political debates. Finland.451 outlets. The Internet has enabled consumers to shop for and purchase goods online from the comfort of their home. Spain. Iceland fell off the list completely after its Baugur Group became a recession casualty.S. Trends of retail industry: Wal-Mart's Impact Wal-Mart is by far the largest retailer (and company) in the U.0 billion over the year which equates to more than half of total revenue in 'General Merchandise Stores' sector in the US  Wal-mart is the largest player in the industry in the US. China¶s ranking fell from #63 to #90. It has become an important figure in social.com and eBay. Russia fell from the #15 position to the #107 position.There were a few big notable shifts in the world¶s largest retailers. The company operates a chain of discount wholesale stores that emphasize incredibly low prices and efficiency that enables the company to offer such low prices. Norway and Lithuania became global powers of retailing. joining this year¶s list at #88 and #221. however. Wal-Mart's successful business model has pushed down prices throughout the retail industry. the largest drop for any one country. The chain was founded by Sam Walton in 1962. E-commerce has added new dimensions to traditional retailers as nearly every major company in the retail industry sells products through their own website (note that some retailers choose to run E-commerce operations in-house while others outsource the operations to E-commerce specialists). Despite this. South Korea. the industry still generated revenue of approximately $335. Walmart still grew in 2008 with financial turmoil seeing struggling consumers substitute high end retail with the relatively less expensive alternatives offered by Wal-Mart Increasing Importance of E-Commerce In the past ten years the Internet has changed the landscape of the retail industry. forcing companies to adapt their business models in order to effectively operate in the new landscape.
for example. There are many product cycles co-occurring at any given point in time.companies like GSI Commerce (GSIC) that provide e-commerce services for retailers. Thank you. As younger. trouble in the US housing market has intensified due to the credit crunch. Product Cycles One of the most influential growth factors for retailers is product cycles. Downturns in the housing market hurt retailers like Home Depot and Lowe's directly. In many cases. E-commerce currently represents approximately 2. create and manage e-commerce sales for retailers that do not wish to run online sales in-house. Internet-savvy customers mature and Internet-usage becomes more widespread over time among consumers of all ages. a number that has steadily grown in past years. Crew Group (JCG).7% of total retail industry revenue ($104 billion annually). Credit Crunch The 2007 credit market squeeze caused by the subprime lending crisis has hurt consumer confidence which has begun to make significant negative impacts on retail sales. Office Depot. So if consumers are out there spending their money. newly innovated products (such as new flat-panel TVs or an updated line of iPods are released with high prices to maximize profits early on. A range of retailers such as Target. and AnnTaylor Stores (ANN) have reported falling same store sales and challenging selling environments due to the economy's struggles. These companies design. Competition between consumer retailers and increased supply from manufacturers drive down prices over time until each retailer makes little profit by the end of a product's life cycle. Also. and vice versa. J. Dick's Sporting Goods. but also hurts consumer electronics retailers like Best Buy and Circuit City because consumers who have recently purchased a home are more often to purchase new home theater and entertainment products to complement their new residence. and these product cycles vary between retail industry sub-sectors. Retail Sales and Unemployment . an important product cycle in consumer electronics retail currently is flat panel HDTVs). How quickly product cycles mature drives the profit a retailer makes. GDP will probably show that the economy is growing. Consumers make up approximately 70 percent of the United State's GDP. Importance of Retail Sales The Retail Sales report is an important leading indicator because it gives us a glimpse into what the upcoming quarterly Gross Domestic Product (GDP) number²a number that gives an idea of how fast the economy is growing or shrinking²might look like. E-commerce will become increasingly relevant.
Retail Industry is heavily dependent on consumer spending. These store are facing stiff competition from the large departmental stores or superstores and in this process they are closing down their shutters. the ubiquitous medium has opened a new avenue in front of the Retailers. Retail serves consumers through a small grocery store to a huge departmental store. Retail Sales and Company Profits The Retail Sales report provides a crucial glimpse into how individual retailers will most likely perform in the future. During economic slow down consumer spending decreases and it poses threat to the Retail industry. you know that earnings and profits at retailers like Walmart (NYSE: WMT). Unemployment tends to rise when the economy slows down or shrinks. Walmart does seem to be one retailer that is able to buck that trend²thanks to its position as a discount retailer that thrives during difficult economic times characterstics Retail Industry: Small to huge store The spectrum of Retail Industry is quite wide in nature. Decline in Small Stores It is observed that small independently owned stores are gradually loosing their foothold in the market place. Consumers confidence is one of the key drivers of the industry. it gives an insight into how the GDP numbers would affect unemployment. But it is also true that many small independent outlets still thrive by knowing their customer s better and providing them with more personalized service. When retail sales are up. In fact 2/3 of US GDP is coming from Retail business.The Retail Sales report also gives a glimpse into what the future unemployment picture might look like. Internet and E-Commerce Internet. As it stands today overall Retail sales through internet may not be that significant but gradually it is gaining popularity . Retail is the second largest industry in US. Home Depot (NYSE: HD) and Macy's (NYSE: M) are going to be growing. In many locations the arrival of a superstore has forced nearby independents out of business. earnings and profits at most retailers are going to be down. It has employed 23 Million people. However. In the book selling business Barnes & Noble superstore or Borders Books and music usually puts smaller bookstores out of business. It has offered an opportunity to the consumers to shop from the home. Conversely. This is a major characteristic prevailing worldwide. and it tends to decline when the economy is strong and growing. Retail Sales affecting the GDP gives an idea of how the economy might be performing. These stores are generally called ³Mom and Pop´ stores and they offer limited merchandise to the consumer. when retail sales are down.
Staples (Office Supplies) are the examples of such Retailers who have grabbed a major market share in that product category and they have forced a reduction in the number of players in that product segment. World wide Retailers are keeping a close watch on this change and they are trying to realign themselves with this change. Home Depot (Home Improvement).For example. Repositioning of Departmental Stores The appeal of big departmental store is in the wane and they are trying to reposition themselves.com is successful in this E-commerce domain. QVC). Amazon. television direct response marketing (Home shopping network. Direct marketing has their root in direct mail and catalog marketing (Land¶s End and LL Bean). Demographic Changes Retail industry is impacted by the demographic changes. They also provide floor help and easy access to the merchandise to facilitate the consumer. Category Killers There are Retailers who actually concentrate on one particular product category and grab a lion¶s share of that market and outperform their competitors. This is also a distinct trend observed in the current Retail market. Direct selling worth about $9 Billion industry with around 600 companies selling door to door. Wal-Mart the worlds largest Retailer comes under this category of Retail store.amongst consumers. Toys R Us (Toy market). Tupperware and Mary key cosmetics are the examples who have adopted this strategy successfully. Ten years back there were number of players in the toy market and no one was controlling more than 5% of market share but now the number of players has come down to six and Toys R Us is enjoying 20% market share. Rise in Discount stores Supremacy of Discount store is also one of the distinct characteristics of Retail Industry today. They are repositioning their product lines to survive in this highly competitive market. Mergers and Acquisitions Retailers who want to dominate the market place have adopted the strategy of mergers and . A departmental stores which is supplying general merchandise to the consumer is changing themselves to a giant apparel store. Electrolux. to lure customers. Retailers have found another sales channel through which they can reach the consumer and this is known as direct marketing. every day low price etc. Southwestern company. Avon. It includes telemarketing. Although an overwhelming majority of goods and services is sold through stores and non store which indicates Retailing is growing at a faster rate. Direct Marketing With the advancement of technology. They are called Category Killers. Discount stores offer money back guarantee. As a result of this change taste of the consumer is undergoing a change and it creates a demand for certain products.
This has helped Nike to enter in to a new market segment . This helps them to occupy more shelf space in the market place. Another important example would be Nikes acquisition of Hurley. This is also one of the distinct trends in Global Retail Industry today. Instead of achieving an organic growth Retailers can grow significantly with the help of mergers and acquisitions. size. This is driven by the economic growth factors. As the volume increases they are establishing better control over their suppliers and they are reducing the procurement cost and in that way they are boosting their profitability.acquisitions. revenue pattern and the customer demand. Sears and Land¶s End merger is one of the significant mergers which has happened in recent times. a well known surfing brand.