The world’s 250 largest retailers recorded sales growth in excess of 5 per cent in fiscal year 2010, according to Deloitte’s 2012 Global Powers of Retailing report, in conjunction with STORES Media.
This marks a substantial improvement on fiscal year 2009 when the group recorded a flat growth of 1.2 per cent.
The report also found that profitability improved, with net profit increasing to 3.8 per cent in 2010, up from 3.1 per cent in 2009.
While this performance has been impressive, retailers will have been concerned by the deterioration in the global economy over the latter half of 2011.
Ira Kalish, director of consumer business for Deloitte Research, part of Deloitte Services LP in the United States, said: "The global economy is decelerating, with growth in 2012 likely to be slower than in 2011 in many of the world's leading markets. The Eurozone crisis continues to drain investor and consumer confidence, while growth in the United States next year is unlikely to significantly reduce unemployment.
"However, retailers may find some silver linings in this otherwise cloudy environment. One positive effect of slower global growth will be the continued dampening of commodity prices. For retailers, this means some improvement on the cost side of the ledger while retail price inflation in some economies presents an opportunity for improved profit margins, even in the context of slow top-line growth."
As part of the top 250 list, Woolworths and Wesfarmers were only two Australian retailers rating number 18 and 21 respectively, while US-company Walmart took out first place.
Meanwhile, the report ranked Wesfarmers in top place as one of the 50 fastest growing retailers from 2005 to 2010.
Deloitte also predicted the 2012 global retail industry trends:
- Retailers will continue to look to enter new markets like Asia Pacific, Africa and South American as higher growth in these regions continue, and they will look to improve their existing operational performances in these markets to achieve sustained growth.
- Since customers do not distinguish between channels, retailers will have to support seamless integration among and between each of them, including access to assortment, customer information and order information. Within the next few years, it is likely that consumers will expect to use a mobile device to get real-time inventory information about the closest stores or to order a product while in a store and have it delivered to their home. Therefore, in 2012 it is likely that retailers will continue to develop and launch innovative multi-channel solutions
- For retailers looking to remain relevant in this connected consumer environment, the ability to leverage mobile to deliver an improved customer experience will be a critical success factor. To be sure, there is a great deal of activity in launching mobile solutions focused on the pre-shopping experience.
- Given all the new channels through which retailers are interacting with consumers, from point-of-sale to mobile to social media sites, the sheer volume of data that can be collected about consumers and their shopping behaviours continue to grow. The industry is evolving quickly in its data analytics capabilities and in its ability to develop personalised marketing campaigns and customer experience.
While technology is bringing radical changes to how people shop, the bricks-and-mortar store remains the core of retail. The physical, however, is no longer the final shopping destination; increasingly, it is becoming a piece in a larger, more connected customer experience. This transition will require retailers to innovate and re-think their operation models in ways many couldn’t even conceive five years ago.