GLOBAL BATTLE 2000-05-22 (2)

David Merrefield

In the battle for dominance in worldwide retailing, there's not much contest: Wal-Mart Stores is the winner with room to spare. But, despite its moves into retailing outside this country, most of its sales volume is generated in this country, and that's at the time retailers elsewhere are consolidating and driving volume from outside their home countries.

Is there much prospect that Wal-Mart could relinquish its lead? Let's find out in a moment, but first let's take a look at who the players are on the world's megaretailer stage. This week's issue of SN provides the key to finding out who's who in the world of retailing, since this global-focus issue contains SN's Top 25 list of the world's retailers. To qualify for the list, they must derive a major portion of sales from food.

Wal-Mart tops the list at $165 billion in sales generated by nearly 4,000 stores. Wal-Mart's non-domestic presence consists of about a quarter of those stores, which together account for less than 10% of its sales volume. Wal-Mart evidently has plenty of growth room left outside the United States.

The world's second-largest food-oriented retailer is Carrefour of France with $80 billion in sales. That magnitude is new since it folds in sales of Promodes, another hypermarket chain in France. The two merged in February. Carrefour's sales volume is generated by way of 8,000 stores in 26 countries, making it quite far flung. But, like Wal-Mart, it's still highly concentrated in its home territory: The bulk of its sales are from France, and nearly 85% from Europe.

So, is Wal-Mart likely to retain its top spot? Most likely it will because it can continue to expand outside the United States, and, in five years or so, it aims to generate a quarter of its sales in non-domestic venues. Nearly all of that should represent top-line growth. Meanwhile, Wal-Mart will continue its domestic campaign of converting discount stores to high-volume Supercenters. There are now about 720 of the latter, which means there is room for growth in this country as well. Incidentally, if America is to export its food-retailing methods abroad, it will be by way of Wal-Mart. No other American food retailer has a significant presence elsewhere.

Another way to look at worldwide retailing is to consider the food product sold by the multinational retailers: Selling globally means sourcing globally and, to some extent, selling product without too much regard for its national origin. But can that be done without worldwide standards, such as those for food safety? Clearly, the lack of blended multinational standards retards global commerce.

In a bid to fill that void, a trade association based in Paris -- CIES, the Food Business Forum -- has formed a task force on which numerous retailers are seated, many of which are American. The group is to take a look at current standards with a view toward incorporating the most useful into a best-practices code. There's a news article on the front page about this.

CIES meets later this month in Dublin, Ireland.