GLOBAL RETAILING 1999

David Merrefield

It's a big world and there's a lot of retailing to be done. And global players of increasingly large size and scope are doing a growing proportion of the world's retailing.

That's the theme of a portion of this week's SN, which features several news and feature articles about global retailing. The best way to start an assessment of the world's top retailers is to take a look at SN's annual Top Global Food Retailers chart on Page 14. James Fallon, a reporter in SN's London bureau, developed the chart and accompanying text.

The size of the global players is impressive, ranging from the largest with nearly $140 billion in annual sales volume to about $14 billion at the bottom of the chart. There are a few exceptions, but nearly every company cited in the chart does a substantial portion of its business in places apart from its home nation.

Several big chains based in the United States are exceptions to the general rule that big companies are international in scope. Companies such as Kroger Co., Albertson's, Supervalu, Fleming Cos. and Winn-Dixie Stores produce sufficient sales volume to rank them among the world's largest food distributors, but none does a significant non-domestic business. Indeed, some of these moved well up the Top-25 list this year because of acquisitions.

The only U.S.-based company with material holdings in other nations is Wal-Mart Stores, by far the world's largest retailer. (There's a news article about Wal-Mart on Page 1.) Safeway, also on the list, does business in Canada.

The virtual absence of U.S.-based food retailers on the global stage is worrisome since the opportunity to grow by acquiring companies elsewhere -- the tactic used by many of the world's largest retailers -- is fading fast.

"It's a race. The opportunities to be a global player are disappearing fast. If you're not part of the club today, it's hard to imagine how you will be able to get into it," Luc Vandevelde, of French retailer Promodes, told SN.

But, at the same time, he quantified the reason why U.S. retailers remain domestically oriented: "The market opportunity in the U.S. is so immense, and the consolidation process there is far from being completed, so American companies understandably are focusing on their own market first."

Meanwhile, though, Richard Fedigan, principal at CIES: The Food Business Forum, told SN he's seeing increasing interest in global activities from U.S.-based food retailers. CIES is the Paris-based association that represents top executives of many of the world's largest retailers and manufacturers. In recent time, Wal-Mart, Albertson's and H.E. Butt Grocery Co. have joined CIES.

Richard sees these new members as an indication of U.S. retailers' growing interest in other parts of the world, and perhaps in keeping tabs on the global companies that are active in acquiring U.S. companies. (There's a news feature about CIES and its annual Congress on Page 10.)

In any case, there will be one more ambassador from this country at CIES' Annual Executive Conference, to be held in Stockholm, Sweden, early next month: This special global-retailing issue of SN.