Week 7 BOC: Largest retailers

The monster retailer Walmart is reported to be the largest retailer globally with worldwide retail sales topping at $453,976,000 (http://www.stores.org/2012/Top-100-Retailers). No other retailer even comes close. In 2011, the US sales alone were $316,083,000 which makes up a bulk of the earnings to date (http://www.stores.org/2012/Top-100-Retailers). Their strength lies in their profitability by providing low cost goods to consumers at high volume. They create relationships with their vendors that drive the prices down in that particular market to force everyone to compete for a chunk of the business.

According to Forbes Magazine, “The biggest International firm (based outside the U.S.) on the list is Spain’s fashion retailer, Inditex" (http://www.forbes.com/sites/andreamurphy/2012/04/18/global-2000-the-worlds-biggest-retailers-2/). They are the parent company responsible for the fast fashion retailer Zara which happens to be their oldest and most well-known brand. Inditex has eight brands altogether and consist of Zara, Zara Home, Bershka, Massimo Dutti, Oysho, Stradivarius, Pull and Bear, and Uterque (http://www.forbes.com/sites/andreamurphy/2012/04/18/global-2000-the-worlds-biggest-retailers-2/). These are all fast fashion retailers which has seen overwhelming growth over the past 10 years because of a failing economy and tighter budgets. People want “bang for their buck” when it comes to fashion clothing. Fast fashion retailers like Zara and H&M provide the latest trends from the runway at incredibly low prices because they source from their factories overseas at high volumes which they can provide at a deeper discount.

The third largest retailer in the US, Target, was recently in the news because of slumping profits due to an underwhelming introduction into the Canadian market. "The competitors have really done a good job in defending their space," said Stewart Samuel, program director at IGD Canada, pointing in particular to Wal-Mart, Loblaw Cos Ltd and Shoppers Drug Mart Corp” (http://www.reuters.com/article/2013/08/21/us-target-results-idUSBRE97K0HR20130821).  The US sales for Target in 2012 topped at $68,466,000 with a growth of 4.1% so the loss in profit recently is seen as very discouraging news (http://www.stores.org/2012/Top-100-Retailers). It is suggested that Target continue to feature steep discounts on their merchandise to help lure away customers from giants like Walmart.