News

The previous financial year (until June 2009) was a tough year for the retail sector and as many as 123 of the Top 250 Global Retail companies experienced profit margins decline during the period. Despite this, the sales of the Top 250 grew with about 5.5% indicating that some companies performed rather well.





The report identifies a number of trends one of which is the increased importance of the role of the consumer. The crisis changed the perception of consuming as it forced consumers to limit spending to match their income instead of mathcing a credit line forcing consumers to be discerning. One indication of this effect is the fact that food-retailers performed well while retailers focusing on apparel and accessories, consumer electronics and home improvement products struggled. An exception from this pattern though was the fashion retailers which did comparatively well despite the fact that they too, saw their profit margins decline.





The fact that consumers had to live on their income changed their behaviour something which may stick with the consumers even if the global economy picks up during 2010. One reason for this is the presence of so-called social media which allows for easy exchange of information among large networks which help create and enhance a demand for more information on companies and on products.

The trend of being price-conscious on the customer side, may force the retailers into what the report calls a "Seller's Auction" where the most desperate seller decides the price level which in turn, will add pressure to the profit margins.





For UNI Commerce Global Union it is of great interest that the report documented that there is a close relation between profitability and geographical presence. The companies that performed best all had a presence in more than 5 countries and global super retailers like Metro and Carrefour had more than 40% of their revenue from operations outside Europe.





By clicking here you can see the Top 250 list.