Deloitte Global report finds the world's top retailers achieved strong growth

The global economy is at a turning point

The Top 250 global retailers generated aggregated revenues of US$4.53 trillion in fiscal year 2017, representing composite growth of 5.7 percent, according to Global Powers of Retailing 2019, a new report from Deloitte Global.

“The global economy is currently at a turning point. Until early 2018, the global economy displayed strong growth. With inflation accelerating in major markets, governments making shifts in monetary and fiscal policies, and most of the emerging markets experiencing significant currency depreciation the global economy will slow down in the near future,” explains Dr. Ira Kalish, Deloitte Global Chief Economist. “For retailers, this change will mean slower consumer spending growth, higher consumer prices, and disrupted global supply chains.”

Global Powers of Retailing Top 250

The world’s Top 10 retailers contributed 31.6 percent share to the Top 250’s total retail revenue in FY2017. The top three retailers maintained their positions in the Top 10. Growth of the Top 10 outpaced that for the Top 250 retailers, at 6.1 percent and 5.7 percent respectively. However, the net profit margin composite for the Top 10 was weaker than the previous year and when compared to the Top 250. This is in large part because eight of the Top 10 retailers operate in the low-margin Fast Moving Consumer Goods¹ (FMCG) sector where margins are increasingly under pressure from rising costs, lower pricing power due to increased competition and transparency, and the need to invest in digital transformation of the businesses.

Europe has the highest number of Top 250 retailers, with 87 companies based in the region (34.8 percent), up from 82 in FY2016. Germany has the largest companies with an average size of US$24.7 billion, which is much higher than the average Top 250 size of US$18.1 billion.

“The Middle East – with Emke Group/Lulu Group International and Majid Al Futtain Holding LLC part of the 250 global retailers - continues to be an attractive destination for retailers. They are adapting to the rapidly changing consumer demand for luxury and premium items, and a more convenient, less time-consuming retail experience,” says Herve Ballantyne, Partner and Consumer & Industrial Products Industry Leader, Deloitte Middle East.

The FMCG sector is the key driver of the Top 250 metrics. The 138 companies (55.2 percent of Top 250 retailers) generated 66.2 percent of the retail revenue in FY2017. In comparison to other sectors, retailers in this sector have the largest average retail revenue (US$21.7 billion in FY2017). Although being the largest contributor to the total retail revenue of the Top 250 companies, this is a low-margin sector with the lowest net profit margin of all the sectors (1.6 percent in FY2017).

¹Fast-moving consumer goods: Products that are sold quickly and at relatively low cost.

To view the whole report, click here

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Deloitte & Touche (M.E.) (DME) is a licensed member firm of Deloitte Touche Tohmatsu Limited (DTTL) and is a leading professional services firm established in the Middle East region with uninterrupted presence since 1926. DME’s presence in the Middle East region is established through its affiliated independent legal entities which are licensed to operate and to provide services under the applicable laws and regulations of the relevant country. DME’s affiliates and related entities cannot oblige each other and/or DME, and when providing services, each affiliate and related entity engages directly and independently with its own clients and shall only be liable for its own acts or omissions and not those of any other affiliate.

DME provides audit and assurance, tax, consulting, financial advisory and risk advisory services through 25 offices in 14 countries with more than 3,300 partners, directors and staff. It has also received numerous awards in the last few years which include, Middle East Best Continuity and Resilience provider (2016), World Tax Awards (2017), Best Advisory and Consultancy Firm (2016), the Middle East Training & Development Excellence Award by the Institute of Chartered Accountants in England and Wales (ICAEW), as well as the best CSR integrated organization.

The information contained in this press release is correct at the time of going to press.

© Press Release 2019