It's obvious enough that the big supermarket retailers are getting bigger, and that the trend is likely to continue. But what may be a little less obvious to those of us in the United States is that such a trend is at work elsewhere in the world as well.
The magnitude of food retailing worldwide is difficult to calculate with much precision because, unlike industry practices in this country, retailers on other parts of the globe tend to be multi-format operators. And the difference between industry practices in this country and elsewhere remain despite all the trade-channel blurring that has gone on in this country.
The difference is essentially this: When we talk about channel blurring in this country, we mean that channels of trade other than supermarkets now sell vast amounts of grocery product. And, for that matter, many supermarket chains now offer fuel, pharmacy and whatnot. But despite all that, it's still quite possible in this country to determine which companies are principally in the food-retailing business, and which aren't.
But in many other parts of the world, such as Western Europe and Japan, there was never a dichotomy between companies that sold food for in-home consumption and those that sold other consumable and durable goods. In Japan, for instance, leading companies such as Ito-Yokado and Daiei tend to operate diverse retailing formats, including supermarkets, convenience stores, department stores, discount stores, drug stores and price-impact outlets. In Europe, especially continental Europe, a bit of the same can be seen. Moreover, the strong European hypermarket-style operators, such as Carrefour and Auchan, tend to sell a wide range of consumable and durable goods under one roof.
All this brings us to SN's analysis of worldwide retailing in the form of the SN Global Top 25, which you'll see on Pages 12 and 13.
The chart presents a hierarchy of food retailers, ranked by sales volume. But, as mentioned, it's difficult enough in this country, and exceedingly difficult worldwide, to define what constitutes a food retailer -- given format and channel blurring. So SN's analysis is developed with the principal that any retailer with a significant proportion of its sales in food wins a spot on the Top 25 chart.
Let's take a look at who's who in food retailing worldwide. Needless to relate, the world's largest retailer that gets a significant part of its sales volume from food is our own Wal-Mart Stores, with something approaching $200 billion in sales volume. As is true of all companies listed in the chart, that volume is produced by all sales, not just food. Wal-Mart is the sole U.S.-based company that derives any sales volume worth considering from outside the country; indeed, it has sales in 10 countries.
It's perhaps a lesser-known fact in this country that the world's second-largest retailer is Carrefour, the French hypermarket operator. Carrefour, too, operates in many parts of the globe, in 24 countries. This marks the first year SN's list includes actual sales volume yielded from Carrefour's acquisition of Promodes, another French hypermarket operator, $55 billion. Last year's list cited pro forma sales of $80 billion, a stark indication that not all mergers go as well as they might.
Observe that the world's second largest retailer ascended to that lofty spot by means of acquisition; Wal-Mart won the top slot largely through organic growth.