Transcript Retailers - itworkss

International Perspective
on Developments in Retailing
Major Impact and Implications for India
Sue J F Evans
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Retailers belong
to a place called…
2
… a population of mastodons
… always ready for cannibalism
… invading green pastures worldwide
… healthier than ever
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Retailers – A population of mastodons:
Nine retailers
belong to Global Fortune 100
Global Fortune 100
Ranking
- Ranking and 2001 revenues in $bn 220
1
24
73
P. Morris
62
35
Carrefour
60
38
Ahold
54
46
Wal-Mart
Home Depot
55
50
Nestlé
56
50
Kroger
68
46
72
44
83
41
Sears
89
40
Target
93
39
P&G
100
38
Unilever
Retailers
Suppliers
Metro
Albertson's
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Retailers: Always ready for cannibalism
… have bought over …
 Wal-Mart
 ASDA
 Carrefour
 Promodés
 Casino
 CBD
 Auchan
Comptoirs Modernes
 Laurus
 Jeronimo
Martins
(Brazil)
 Docks
de France
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Retailers: Invading green pastures worldwide
International presence of top 20 retailers
countries
82countries
82
countries
11countries
11
1992
1992
2002
2002
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Retailers: Healthier than ever
Return On Capital Employed (ROCE)
- 2001 20%
13%
11%
10%
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Major trends

Cannibalism will accelerate

Retailers are pushed to look for new "green pastures”

Genetic mutation – retailers succeed in building brands
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Cannibalism: Suppliers still have the largest slice
of the cake, but retailers will fill the gap rapidly…
Comparison of ROCE among retailers and suppliers
2001
Colgate (31%)
Colgate (31%)
P&G (24%)P&G (24%)
Wal-Mart
(20%) (20%)
Wal-Mart
Tesco
(13%) (13%)
Tesco
Carrefour
(11%) (11%)
Carrefour
Casino
(10%)
Casino (10%)
Retailers
L'Oréal (20%)
L'Oreal (20%)
Coca ColaCoca
(15%)Cola (15%)
Nestlé (14%)
Nestlé (14%)
Suppliers
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…And will emulate the concentration that has
already taken place amongst suppliers
Market shares in France
- 2001 volumes, in % Suppliers
Other
13
Pepsi 8
Private Label
13
Other
35
Other 8
Private Label
12
Colgate 10
Colgate 3
P&G 5
Private Label 7
Unilever 9
Coca Cola
66
L'Oréal
41
Colas
Retailers
Shampoos
Henkel
20
Unilever
25
P&G
25
Other
37
Cora 3
Géant 4
Système U 6
Auchan 10
Carrefour 12
Intermarché
12
Leclerc
16
Detergents
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Green Pastures : Retailers have already entered the
obvious geographies and reached critical mass
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To help retailers prioritize their expansion plans,
A.T. Kearney has recently published the Global
Retail Development Index

Based on expert interviews and extensive local data

Covering 180 countries worldwide

Driven by three major questions
Is the country economically
viable?
• Economic stability
• Political risk
• Debt, credit balance
• …
Is the retail market attractive?
• Modern retail area per
inhabitant
• Number of international
retailers in the country
When do I have to go there?
• Modern retail area growth
rate compared to GDP growth
rate
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India ranks number 6… and is already very
seriously on the radar screen of major retailers
GRDI 2002
Index between 0 and 100
On the radar screen
To consider
China
76
To avoid
61
Ukraine
Hong
Kong
51
70
Korea, Rep.
57
Malaysia
51
Hungary
70
South Africa
57
Czech
Republic
50
Russia
69
Thailand
56
Israel
49
Morocco
69
Venezuela
56
Indonesia
46
46
Slovakia
India
65
Bulgaria
55
Philippines
Vietnam
63
Colombia
55
Poland
Chili
62
Romania
54
Brazil
Turkey
61
Mexico
52
Egypt
61
Taiwan
52
Argentina
42
26
24
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Genetic Mutation: When retailers succeed in
building powerful brands
= 100%
private label = big results
Results
+10%
Leader Price Concept

Part of the Casino Group

Surface
: 1,000 sqm

# SKU
food)
: 2,800 (mostly

ONLY PRIVATE LABEL

Pricing

Assortment :
Sales evolution
1st half 2002/2001
(pro forma)
Other supermarkets
4.2%
Leader Price
6%
Other supermarkets
3.9%
Operating margin
%
Leader Price
: Nielsen index 90
deep
Global expansion
(# stores)
• France (100)
• Poland (70)
• Thailand
• Argentina
• Benelux
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Implications for India

Be ready!
… retail mastodons
pastures"
will
enter
the
Indian
"green
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“Organised” retail in India will inevitably grow as
income levels and urban concentration increase
Organized retail
penetration (%)
Organized retail
penetration (%)
GDP
URBANISATION
100
100
Brazil
Brazil
75
75
China
50
50
Poland
China
Poland
25
Indonesia
India
0
0
2 000
25
Malaysia
Thailand
4 000
6 000
8 000
Per capita
GDP ($)
10 000
0
0%
Malaysia
Thailand
Indonesia
India
10%
20%
30%
40%
Urban
concentrati
on (% of
pop. In top
8 cities)
By 2007, the Top 10 states in India would have an average per capita GDP c $5,000
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Implications for India

Be ready!

Be realistic!
….
Small players can flourish in the
environment if they adapt themselves
changing
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Evidence from other emergent markets shows that
traditional outlets will survive
CHINA
12,936,000
Retail structure in number of outlets
(absolute numbers)
Specialists
10,122,000
Independent grocers
Convenience stores
Discounters
Cooperatives
Hypermarkets
Supermarkets
1996
1997
1998
1999
2000
Source: Euromonitor
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Implications for India

Be ready!

Be realistic!

Be resilient!
…
Indian retailers can benefit from adopting
management techniques to improve efficiencies
latest
retail
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AND DON'T FORGET…
… dinosaurs sometimes disappear !!
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