Retail Market Assessment Report

© 2014 IBM Corporation

IBM Market Development & Insights

Retail Market Assessment Report

Angelia Muller- Global Retail Advisor

November 2014



Table of Contents

Executive Summary 3

Global Retail Sales 4

NA Retail Sales 5

IT Spending 6

Web, Web-influenced, non-web sales 7

E-Commerce 8

New Retail 12

Top Challenges 14

Leading Trends 16

Sub-segment Retail Analysis 22

Hypermarkets and Superstores 24

Supermarkets 27

Drugstores and Pharmacies 30

Discount Stores 33

Convenience Stores 36

Wholesale Clubs 39

2



Executive SummaryEconomics

Global retail sales is forecasted at $19.7trillion; growing at 5.4%

Asia is the largest by total sales, North America is the largest by sales per capita

According to the NRF, sales forecast in the US in November and December is expected to increase 4.1% to $616.9 billion; online sales growth at 8-11%

Market Situation Market Trends Market Challenges

In 2014, 52% of all retail sales are web-influenced. The customer journey has grown more complex– before making an online or offline purchase decision, a customer may engage with a retailer through many different media channels, spanning over a long timeline

Most retail brands have started exploring the possibilities of the highly connected world of smartphones, mobile apps, social media, GPS and M2M technologies like RFID and sensors.

Personalized customer experience is consistently ranked by Retail executives as the number one area to be addressed

E-Commerce sales are still a fraction of total retail sales; however, 1 in 20 retail dollars are now online

Synchronize the shopping experience across channels Retiring legacy systems is considered the number one challenge over the next two years

A breakdown of all retail activity in the US illustrates e-commerce to be the dominant driver for growth

Focus on the development of cloudcomputing, technical aspects andtypes of benefit.

Mobility has moved to the forefront of retail strategy with application development, mobile security and application integration being the priority to satisfy empowered customers

Looking at top retailers’ sales, the growth rate of top retailers’ online sales is also increasing

In supply chain trends, multi-channel strategies are graining traction; especially in the area of multi-channel fulfillment.

Big data management is considered key

New retail models emerged targeting digital natives are disrupting traditional models; Market capitalization of new Retail models are now leveling with traditional models

Merchandise technology most urgent include Replenishment of products, Item Management, Forecasting and Planning, New Product Development, and Allocation

Upgrading store-level bandwidth and infrastructure through Cloud technologies to reduce cost and facilitate store optimization

The 2013 Retail and Wholesale vertical industry average IT spending as a percentage of revenue is at 1.5%; as a percent of operating expense is at 1.8%, the same as in 2012.

Demand chain technology is in high demand as retailers look to business intelligence and analytics to optimize margins and understand consumer behavior

3



The global retail sales is forecasted at $19.7 trillion growing at 5.4%

0

5,000,000,000,000

10,000,000,000,000

15,000,000,000,000

20,000,000,000,000

25,000,000,000,000

30,000,000,000,000

19,672,165,305,200

20,923,368,131,100

22,282,140,606,800

23,749,602,737,300

25,324,579,246,900

27,010,281,059,000

2014 2015 2016 2017 2018 2019

Worldwide Total Retail Sales ($Bn)CAGR 5.43%

Asia Australia & Oceania

Africa & Middle East

Central & Eastern Europe

Western Europe

North America

Latin America

0

1,000,000,000,000

2,000,000,000,000

3,000,000,000,000

4,000,000,000,000

5,000,000,000,000

6,000,000,000,000

7,000,000,000,000

8,000,000,000,000Total Retail Sales ($Bn) by Region Total Retail Sales per Capita by Region

Asia

0

2,000

4,000

6,000

8,000

10,000

12,000

Australia & Oceania

Africa & Middle East


Western Europe

North America

Latin America

Asia is the largest region by total retail sales;N. America is thelargest by sales per capita



In North America, sales forecast in November and December is expected to increase 4.1 percent to $616.9 billion

• After a turbulent start to 2014, the NRF announces it expects sales in November and December (excluding autos, gas and restaurant sales) to increase a healthy 4.1 percent to $616.9 billion

• Higher than 2013’s actual 3.1 percent increase during that same time frame

2014 Holiday Sales

$616.9 Billion

Percentage increase

4.1%over 2013

Online sales

8-11%growth

2008 2008 2009 2010 2011 2012 2013 20140

100

200

300

400

500

600

700

Total Holiday Sales (in Billions)

% of Annual Sales Non-Holiday Months

% of Annual Sales from Holiday Months

Holiday Sales as Percentage of Annual Sales (2013)



6 Insert title here

Market Average Retail and Wholesale IT Spending as a Percent of Revenue at 1.5%; remains unchanged YOY

<$250M in Revenue

$250M - $500M in Revenue

$500M - $ 1B in Revenue

$1B- $10B in Revenue

$10B+ in Revenue

1.7%, 1.6%. 1.9% 1.6% 1.2%

Retail and Wholesale: IT Spending as a Percent of Revenue: by Revenue Scale

Retail and Wholesale: IT Spending as a Percent of Revenue

Retail and Wholesale: IT Capital vs. Operational Spending

The 2013 Retail and Wholesale vertical industry average IT spending as a percentage of revenue is at 1.5%; as a percent of operating expense is at 1.8%, the same as in 2012.

The IT investment profile with 65%-35% Operational to Capital ratio illustrates visibilityInto the cyclical nature of capital investments

compared with recurring operational expenses



7

The majority of retail sales today in the U.S Retail industry is influenced by the web; direct or indirectly

2012 2013 2014 2015 2016 2017$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$1,164 $1,290 $1,412 $1,551 $1,667 $1,796

$231 $261 $290 $319 $345 $371

U.S. Cross-Channel Retail Sales

Non-Web Influenced Offline Sales Web-Influenced Offline Sales Online SalesSource: Forrester

Bill

ion

s

$1,609 $1,574 $1,547 $1,494 $1,470 $1,437

In 2014, 52% of all retail sales are web-influenced. The customer journey has grown more complex– before making an online or offline purchase decision, a customer may engage with a retailer through many different media channels, spanning over a long timeline



E-Commerce sales are a small fraction, but is driving nearly all retail growth in US

E-Commerce sales are still a fraction of total retail sales; however, 1 in 20 retail dollars are now online

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

5,000,000

E-Commerce SalesE-Commerce SalesE-Commerce SalesE-Commerce SalesE-Commerce SalesE-Commerce SalesE-Commerce SalesE-Commerce SalesE-Commerce SalesE-Commerce SalesE-Commerce SalesE-Commerce SalesE-Commerce SalesE-Commerce Sales

Total Total Total Total Total

Total Total Total Total Total Total

Total Total Total

Online Share Of U.S. Retail Sales

Source: U.S. Department Of Commerce

(Mill

ion

s)



E-Commerce sales are a small fraction, but is driving nearly all retail growth in US

A breakdown of all retail activity in the US illustrates e-commerce to be the dominant driver for growth

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

Retail Industry Sales Growth: Online vs. Offline U.S.

E-Commerce Sales Offline Retail Sales E-Commerce Growth Offline Retail Growth

Source: U.S. Department Of Commerce

Mill

ion

s



2008 2009 2010 2011 2012 2013

-10.00%

-5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

Offline vs. Online Sales Growth For Top RetailersGlobal

Source: Company Filings, Internet Retailer, BI Intelligence Estimates

*Includes Wal-Mart, JCPenney, Best Buy, Gap Trendline

Online

Offline

Looking at top retailers’ sales, the growth rate of top retailers’ online sales is also increasingCompared to offline sales, which have been steadily decreasing for major retailers since 2010, the difference in growth rates is stark



2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120%

5%

10%

15%

20%

25%

30%

35%

40%

Percent Of Retail Sales Attributable To Online In Selected Merchandise Categories (U.S.)

Source: U.S. Census, BI Intelligence Estimates

Media, Sporting, and Hobby Goods

Electronics and Appli-ances

Furniture and Home Furnishings

Clothing and Accessories

Health and Personal Care

Food and Beverage

Media, sporting, and hobby goods is at the top of E-commerce categories; this includes digital media to be downloaded The category includes digital media (music, movies, books) that people download to their computers, e-readers, tablets and phones



New retail models emerged targeting digital natives are disrupting traditional models



Market capitalization of new Retail models are now leveling with traditional modelsAmazon, eBay, Rakutan, Zully and Overstock are nearly equal in market value compared to traditional Retail models

New Models Traditional Models$0

$50

$100

$150

$200

$250

$300

Amazon

eBay

RakutenZulilyOverstock

Wal-Mart

GapBest BuyJCPenney

Market Cap Of Selected RetailersMarch 24, 2014

Source: Yahoo and Google Finance

Bil

lio

ns

$265 Market Value

$279 Market Value



Top Challenges



Retail Top Challenges in the next 3 years

Personalized customer expe-

rience; 60%Knowledgeable

employees; 20%

Better/faster service; 10%

Other; 10%

Shopping Factors That Retail Executives Say They Are Missing (U.S.)

Source: TimeTrade Retail In-dustry Executive Survey; RIS Retail Technology Study, 2013

• Personalized customer experience is consistently ranked by Retail executives as the number one area to be addressed

• Retiring legacy systems is considered the number one challenge over the next two years

• Mobility has moved to the forefront of retail strategy with application development, mobile security and application integration being the priority to satisfy empowered customers

• Big data management is considered key

• Upgrading store-level bandwidth and infrastructure through Cloud technologies to reduce cost and facilitate store optimization



Leading Trends 2014



Trend 1: Seamless Commerce

• Rapid year-over-year increases in online revenue has capped several years of digit growth; propelling integration of digital channels into core business

• 28.3% of retailers have indicated upgrades of platform occurring now

• 27.4% of retailers have already re-platformed within the last two years and see no need to upgrade

• 44.3% of Retailers indicate that their organization’s customer facing mobile channel development is well under way

Synchronize the shopping experience across channels

Source: RIS Retail Technology Study, 2013



Trend 2: Reshaping the Physical Store

• The store remains a key focus of tech investments: despite rapid growth of digital channels, stores are still where the vast majority of transactions take place

• As retailers move closer to a seamless omni-channel operating model, retailers are beginning to use store technology not just to sell more products but to learn more about their shoppers

• Frequent shopper/loyalty programs, shopper tracking capabilities are highly interesting for retailers to gather as much information about consumers as possible

• As stores become one channel among many that today’s consumers use on their path to purchase, retailers are invested in mobile POS

Mobility, RFID, and customer loyalty investments enhance stores’ Pivotal role




Trend 3: Merchandising and Supply Chain Synchronization

• Retail organizations have reported that replenishment of products to store and item management need to be kept up to date as these merchandising technologies keep the store in operation

• Other special goals include multi-channel planning and forecasting; campaign management; shelf and space planning; and product lifecycle management

Merchandise technology most urgent include Replenishment of products, Item Management, Forecasting and Planning, New Product Development, and Allocation




Trend 3: Merchandising and Supply Chain Synchronization (cont’d)

• 18% of Retailers plan to begin deployment in multi-channel fulfillment, and 22% will begin in 12 to 24 months

• Real time inventory visibility is also desired, as well as trade promotion management

In supply chain trends, multi-channel strategies are graining traction; especially in the area of multi-channel fulfillment.




Trend 4: Big Data & Analytics Technology Adoption

• Technologies demanded include market basket analysis, shopper tracking, margin optimization, predictive analytics, social media analytics

• Predictive analytics is considered most high in demand

Demand chain technology is in high demand as retailers look to business intelligence and analytics to optimize margins and understand consumer behavior




Retail Industry Sub-segment Analysis



Breaking down Retail industry into 7 sub-segments, discount stores and convenience stores will be the fastest growing categories

-

500

1,000

1,500

2,000

2,500

1,5

89

72

6

28

8

24

5

14

4

26

4

31

1

1,7

93

85

0

36

6

32

3

31

7

31

9

36

4

2,1

87

1,0

80

50

4

43

7

65

3

42

5

46

2

2008 2013 2018f

Re

tail

Ba

nn

er

Sa

les

(US

D b

n)

Note: CAGR calculated in USD. Data relates to retailers in the PR database only; f – forecast.Source: Planet Retail

CAGR 2013-

2018

4.9%

6.6%6.2%

15.5%

5.9% 4.8%

4.1%

Global: Channel Sizes by Sales, 2008-2018f (USD bn)



Hypermarkets and Superstores



25

Hypermarkets are set to grow more rapidly in emerging markets-compact concepts potential in advanced markets. Hypermarkets will remain by far the world’s biggest grocery channel - despite slowing expansion in some markets

2008 2013 2018

0

200

400

600

800

1,000

1,200

778.7870.7

1,028

North America

Sa

les

(U

SD

bn

)

2008 2013 2018

0

100

200

300

400

500

600

700

473.5 462.8530.8

Western Europe

Sa

les

(U

SD

bn

)

2008 2013 2018

0

20

40

60

80

100

120

140

62.976.9

124.4

Sa

les

(U

SD

bn

)


2008 2013 2018

020406080

100120140160180200

84112

145

Latin America

Sa

les

(U

SD

bn

)

2008 2013 2018

05

101520253035404550

18.6

29.6

44.2Middle East & Africa

Sa

les

(U

SD

bn

)

2008 2013 2018

0

50

100

150

200

250

300

350

171.1

240.3

314.2Asia & Oceania

Sa

les

(U

SD

bn

)

8.3% 5.5%

3.3% 2.8% 10.1%

5.2%

CAGR 2013-

2018

Hypermarkets & Superstores: Global Sales, 2008-2018f (USD bn)



Many hypermarket operators in advanced markets are increasingly looking to downsize and/or open more compact formats, e.g. Walmart Neighborhood Market in the US.

Multi-channel and e-commerce (instore kiosk, Click & Collect and Drive) are key parts of both Tesco’s and Auchan’s strategy.

In Western European markets, Tesco and Carrefour are aiming to increase dwell time within stores with additional facilities and entertainment features.

Walmart Kroger Auchan Tesco Target0

100,000

200,000

300,000

400,000

500,000

600,000

405,635.83

98,062.0669,237.33

86,769.99 75,455.79

482,411.22

124,526.97101,105.19 96,807.06 90,391.22

20132018f

Re

ven

ue

(U

SD

bn

)

Hypermarkets and Superstores: Top Retailers’ Revenue, 2013-2018f (USD bn)

Note: f - forecastSource: Planet Retail

Walmart is the world’s largest hypermarket chain; four-folds the size of other hypermarkets and super-stores



Supermarkets &

Food and Beverage



28

Revenue growth from supermarkets and grocery stores will come from emerging marketsThe channel growth will be squeezed by discounters aiming to become one-stop shopping destination and the fast-growing convenience store channel

2008 2013 2018

05

101520253035404550

30.035.9

46.3North America

Sa

les

(U

SD

bn

)

2008 2013 2018

0

100

200

300

400

500

600

700

426.7 439.6528.1

Western Europe

Sa

les

(U

SD

bn

)

2008 2013 2018

0

40

80

120

160

200

79.2106.5

170.4

Sa

les

(U

SD

bn

)


2008 2013 2018

0

10

20

30

40

50

60

70

34.3

46.4

61.0

Latin America

Sa

les

(U

SD

bn

)

2008 2013 2018

05

101520253035404550

21.6

29.8

40.8

Middle East & Africa

Sa

les

(U

SD

bn

)

2008 2013 2018

0

50

100

150

200

250

134.1

191.5

233.2Asia & Oceania

Sa

les

(U

SD

bn

)

6.5% 4.0%

5.3% 3.7% 9.9%

5.6%

CAGR 2013-

2018

Supermarkets & Neighbourhood Stores: Global Sales, 2008-2018f (USD bn)



The channel growth will be squeezed by discounters aiming to become one-stop shopping destination and the fast-growing convenience store channel.

Woolworths (AUS), will invest in differentiation of its supermarkets, particularly from Aldi, introducing sushi, deli, freshly cooked offerings, instore cafés to stores in affluent catchment areas, as well as rolling out Click & Collect services.

Rewe Group is experimenting with the diversification of its store network at home (Rewe) and abroad (Billa), trialling smaller convenience-orientated formats and forecourt stores as well as larger superstores.

The development of supermarkets is not on the agenda for ITM (Intermarché) while Carrefour is refurbishing them.

Supermarkets & Neighbourhood Stores: Top Retailers’ Revenue, 2013-2018f (USD bn)

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

45,923.95

39,472.00 40,368.39

34,891.1232,216.13

56,120.71

49,624.7547,679.29

41,000.6837,700.01

20132018f

Re

ven

ue

(U

SD

bn

)


Woolworths (AUS) and Rewe Group are looking for new store concepts



Drugstores and Pharmacies



31

Drugstores and pharmacies witness strong growth in emerging markets due to a growing middle class consumer segment

The channel growth will be squeezed by discounters aiming to become one-stop shopping destination and the fast-growing convenience store channel

CAGR 2013-

2018

2008 2013 2018

0

50

100

150

200

250

300

190.4221.0

267.7North America

Sa

les

(U

SD

bn

)

2008 2013 2018

0102030405060708090

72.766.4

84.7Western Europe

Sa

les

(U

SD

bn

)

2008 2013 2018

0

2

4

6

8

10

12

14

16

6.78.7

13.0

Sa

les

(U

SD

bn

)


2008 2013 2018

0

5

10

15

20

25

7.0

13.0

19.5

Latin America

Sa

les

(U

SD

bn

)

2008 2013 2018

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

1.2

2.0


Sa

les

(U

SD

bn

)

2008 2013 2018

0

10

20

30

40

50

60

70

80

33.4

53.3

73.6Asia & Oceania

Sa

les

(U

SD

bn

)

8.7% 6.7%

3.9% 5.0%

8.3%

8.5%

Drugstores and Pharmacies: Global Sales, 2008-2018f (USD bn)



Outside their domestic market, CVS is predicting its newly acquired Brazilian chain will perform at a double digit growth rate over the next decade, while Walgreens will leverage its partnership with Alliance Boots, particularly in terms of private label and best practise learnings.

AS Watson is forecasted to overtake Rite Aid by 2018. This is due to its strong expansion rates in Asian markets paired with a strong performance of affiliate Rossmann.

Rite Aid is the only US operator in theranking that has not shown intentions to step abroad. Growth of the retailer is limited.

Over the short to medium term, Walgreens and CVS will reap the rewards of the US’ implementation of Obamacare.

Walgreens and CVS remain the largest drugstores and pharmacies operators

Drugstores and Pharmacies: Top Retailers’ Revenue, 2013-2018f (USD bn)

Walgreens CVS AS Watson Rite Aid Alliance Boots

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

72,330.5067,654.07

23,100.8725,654.69

14,246.95

89,706.8686,884.23

33,284.10

26,831.56

17,110.77

20132018f

Re

ven

ue

(U

SD

bn

)




Discount Stores



34

Discount stores are still predominantly European, with significant growth rates in all regionsAfter decades of relentless expansion, several discounters have entered a consolidation process in mature European markets, reviewing store productivity

Discount Stores: Global Sales, 2008-2018f (USD bn)

2008 2013 2018

0102030405060708090

100

39.7

62.1

91.1North America

Sa

les

(U

SD

bn

)

2008 2013 2018

0

50

100

150

200

250

300

350

205.3228.0

285.6

Western Europe

Sa

les

(U

SD

bn

)

2008 2013 2018

0

10

20

30

40

50

60

21.2

30.8

49.9

Sa

les

(U

SD

bn

)


2008 2013 2018

0

5

10

15

20

25

30

5.5

14.5

27.3Latin America

Sa

les

(U

SD

bn

)

2008 2013 2018

0

1

2

3

4

5

1.7

3.4


Sa

les

(U

SD

bn

)

2008 2013 2018

05

101520253035404550

14.5

26.8

45.3Asia & Oceania

Sa

les

(U

SD

bn

)

5.8% 11.1%

8.0% 4.6% 10.2%

13.5%

CAGR 2013-

2018



Brand listings have recently given Aldi Nord and Süd lasting tailwind in sales, meaning that it will keep its globally leading position over the next five years.

Schwarz Group’s Lidl is assessing a potential US market entry, which would provide endless growth opportunities as expansion is close to a saturation in many European markets.

Dollar General, the only ‘dollar store’ among the Top 5, keeps aggressively growing its store base - opening an average of nearly two stores a day. It is solidly positioned as a convenient easy-to-shop low-priced alternative to big-box retailers in the USA.

Aldi and Schwarz Group are the largest discount stores

Discount Stores: Top Retailers’ Revenue, 2013-2018f (USD bn)

Aldi Schwarz Group

Dollar General

Edeka Dia0

20,000

40,000

60,000

80,000

100,000

120,000

80,733.9774,838.96

18,907.61 18,676.3415,318.51

103,243.55 100,903.39

28,525.2522,248.99 21,088.49

20132018f

Re

ven

ue

(U

SD

bn

)




Convenience Stores



37

Asia & Oceania is the largest convenience store market; CEE and Latin America are increasing in growth ratesAfter decades of relentless expansion, several discounters have entered a consolidation process in mature European markets, reviewing store productivity

Convenience & Forecourt Stores: Global Sales, 2008-2018f (USD bn)

2008 2013 2018

0102030405060708090

100

39.7

62.1

91.1North America

Sa

les

(U

SD

bn

)

2008 2013 2018

0

50

100

150

200

250

300

350

205.3228.0

285.6

Western Europe

Sa

les

(U

SD

bn

)

2008 2013 2018

0

10

20

30

40

50

60

21.2

30.8

49.9

Sa

les

(U

SD

bn

)


2008 2013 2018

0

5

10

15

20

25

30

5.5

14.5

27.3Latin America

Sa

les

(U

SD

bn

)

2008 2013 2018

0

1

2

3

4

5

1.7

3.4


Sa

les

(U

SD

bn

)

2008 2013 2018

05

101520253035404550

14.5

26.8

45.3Asia & Oceania

Sa

les

(U

SD

bn

)

5.8% 11.1%

8.0% 4.6% 10.2%

13.5%

CAGR 2013-

2018



Japanese retailers head the global convenience store sector, while Seven & I and Tesco will be the fastest growing among the top players.

Seven & I has aggressive investment plans for USA, Canada and South-East Asia, along with investment in e-commerce.

Tesco is to invest in Tesco Express in its home market as well as in promising Asian markets like Thailand & South Korea.

Both Seven & I and Tesco will be investing in multi-channel, introducing Click & Collect into its stores.

Retailers’ trials to operate convenience stores at petrol stations tend to fail in Europe (Carrefour - BP in Spain; Edeka - Shell in Germany).

As the convenience concept is extremely compatible with E-commerce, retailers are looking to invest

Convenience & Forecourt Stores: Top Retailers’ Revenue, 2013-2018f (USD bn)

Seven & I FamilyMart LAWSON Tesco BP0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

84,866.00

25,948.6119,415.73

11,201.04 13,207.94

126,179.00

31,558.79

22,746.5519,261.55

15,051.10

20132018f

Re

ven

ue

(U

SD

bn

)




Wholesale Clubs



40

By 2020, Latin America will reach Western Europe with the size of the Wholesale Club market

CAGR 2013-

2018

2008 2013 2018

0

50

100

150

200

250

133.4

173.4

225.8North America

Sa

les

(U

SD

bn

)

2008 2013 2018

0

20

40

60

80

60.555.2

62.4

Western Europe

Sa

les

(U

SD

bn

)

2008 2013 2018

0

5

10

15

20

25

30

3529.3

24.0

30.3

Sa

les

(U

SD

bn

)


2008 2013 2018

0

10

20

30

40

50

60

70

21.8

37.2

58.9

Latin America

Sa

les

(U

SD

bn

)

2008 2013 2018

0.0

2.0

4.0

6.0

8.06.5

5.1


Sa

les

(U

SD

bn

)

2008 2013 2018

05

1015202530354045

12.9

24.2

40.3

Asia & Oceania

Sa

les

(U

SD

bn

)

7.0% 10.8%

5.4% 2.5%

4.7%

9.6%

Wholesale Clubs & Cash and Carry: Global Sales, 2008-2018f (USD bn)

The Wholesale Club channel is to grow rapidly over the next five years



Japan, South Korea and Australia remain Costco’s hotspots, while market entry to Europe is planned for both Spain and France in 2014.

Costco has been outperforming Walmart in USA in terms of LFL sales since 2011.

Walmart’s annual capital expenditure in Sam’s Club is around USD1 billion - less than a half of Costco’s.

Metro Group is looking for new cash & carry concepts suitable for its various markets. International expansion will be focused on China, Russia and Turkey.

Costco will widen its gap on Walmart, while Metro Group fights for its position in Europe

Cash & Carry and Wholesale Clubs: Top Retailers’ Revenue, 2013-2018f (USD bn)

Costco Walmart Metro Group Carrefour BJ's Wholesale

Club

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

107,719.20

76,483.42

46,629.80

10,944.94 13,404.94

154,716.85

95,837.96

54,916.86

18,381.35 16,631.34

20132018f

Re

ven

ue

(U

SD

bn

)




42 Retail Market Assessment Report

Additional Research

Pivot Table: Worldwide Retail IT Spending Guide, Version 1, 2013, IDC, 2014https://w3-03.sso.ibm.com/marketing/mi/compdlib.nsf/weball/0F89352C028BE37B85257D8F0068650A2014 IT Budget Dynamics in Western European Retail, IDC, 2014https://w3-03.sso.ibm.com/marketing/mi/compdlib.nsf/weball/BFBA66C4656EAA9985257CCB0062E93BBest Practices: Retail 2013Investment Guide, IDC, 2013https://w3-03.sso.ibm.com/marketing/mi/compdlib.nsf/weball/4786792E1D94595C85257C0C0062E85FIT Customer Strategy Consulting in the Retail Industry, Kennedy Information, 2014https://w3-03.sso.ibm.com/marketing/mi/compdlib.nsf/weball/33FD8F8077F71F6800257D5400539F53Trends in Retail:Retail & Wholesale - Market InBrief –US, PAC, 2014https://w3-03.sso.ibm.com/marketing/mi/compdlib.nsf/weball/EBBB0858B945E3CF85257C7E0046F80CIDC FutureScape: Worldwide IDC Retail Insights 2015 Predictions It's All About Participation Now, IDC, 2014https://w3-03.sso.ibm.com/marketing/mi/compdlib.nsf/weball/EF877C80E899196D85257D8F006861D1Worldwide Retail 2014 Top 10 Predictions: Retail Reinvents Itself for Relationship, Relevance, and Reciprocity, IDC, 2014https://w3-03.sso.ibm.com/marketing/mi/compdlib.nsf/weball/443D178C8B77EB5E85257C5A00686158Global Trends and Forecasts 2014, Planet Retail, 2014https://w3-03.sso.ibm.com/marketing/mi/mihome.nsf/ContentDocs/_BE6FE4FA69A5254900257C8D00799F09The State Of Retailing Online: Key Metrics And Initiatives 2014, Forrester, 2014https://w3-03.sso.ibm.com/marketing/mi/compdlib.nsf/weball/C6EC4524E3D3FCFC00257D15002C81F0 2014 Top 10 Emerging Agenda Predictions for Retailers, IDC, 2014https://w3-03.sso.ibm.com/marketing/mi/compdlib.nsf/weball/FF907242FB9A522885257C5C00686429 CAMS in Retail:Business Strategy: IDC Maturity Model Benchmark —Big Data and Analytics in Retail in North America, IDC, 2014https://w3-03.sso.ibm.com/marketing/mi/compdlib.nsf/weball/03DAC4CE6EAE225285257C7C00686791Social Business and Western European Retailers: The Road to Revenue Generation, IDC, 2013https://w3-03.sso.ibm.com/marketing/mi/compdlib.nsf/weball/F6B07DC12E00F82D85257C480068672BMethods and Practices: Cloud in Retail, IDC, 2013https://w3-03.sso.ibm.com/marketing/mi/compdlib.nsf/weball/6BCBEC0E8331B02C85257BFF0058AE26Perspective: Social in Retail —Increasing Adoption for the Customer, IDC, 2013https://w3-03.sso.ibm.com/marketing/mi/compdlib.nsf/weball/7CB59BD6A0DE5B7D85257BFF0058A6F1Business Strategy: Retail Mobile Enterprise Security —Striking a Balance between Usability and Risk in Retail, IDC, 2013https://w3-03.sso.ibm.com/marketing/mi/compdlib.nsf/weball/9C89AA6AB94F832285257C2C0068654EBig Data in Retail, Frost & Sullivan, 2014

https://w3-03.sso.ibm.com/marketing/mi/compdlib.nsf/weball/0F89352C028BE37B85257D8F0068650A

https://w3-03.sso.ibm.com/marketing/mi/compdlib.nsf/weball/BFBA66C4656EAA9985257CCB0062E93B

https://w3-03.sso.ibm.com/marketing/mi/compdlib.nsf/weball/4786792E1D94595C85257C0C0062E85F

https://w3-03.sso.ibm.com/marketing/mi/compdlib.nsf/weball/33FD8F8077F71F6800257D5400539F53

https://w3-03.sso.ibm.com/marketing/mi/compdlib.nsf/weball/EBBB0858B945E3CF85257C7E0046F80C

https://w3-03.sso.ibm.com/marketing/mi/compdlib.nsf/weball/EF877C80E899196D85257D8F006861D1

https://w3-03.sso.ibm.com/marketing/mi/compdlib.nsf/weball/443D178C8B77EB5E85257C5A00686158

https://w3-03.sso.ibm.com/marketing/mi/mihome.nsf/ContentDocs/_BE6FE4FA69A5254900257C8D00799F09

https://w3-03.sso.ibm.com/marketing/mi/compdlib.nsf/weball/C6EC4524E3D3FCFC00257D15002C81F0

https://w3-03.sso.ibm.com/marketing/mi/compdlib.nsf/weball/C6EC4524E3D3FCFC00257D15002C81F0

https://w3-03.sso.ibm.com/marketing/mi/compdlib.nsf/weball/FF907242FB9A522885257C5C00686429

https://w3-03.sso.ibm.com/marketing/mi/compdlib.nsf/weball/FF907242FB9A522885257C5C00686429

https://w3-03.sso.ibm.com/marketing/mi/compdlib.nsf/weball/03DAC4CE6EAE225285257C7C00686791

https://w3-03.sso.ibm.com/marketing/mi/compdlib.nsf/weball/F6B07DC12E00F82D85257C480068672B

https://w3-03.sso.ibm.com/marketing/mi/compdlib.nsf/weball/6BCBEC0E8331B02C85257BFF0058AE26

https://w3-03.sso.ibm.com/marketing/mi/compdlib.nsf/weball/7CB59BD6A0DE5B7D85257BFF0058A6F1

https://w3-03.sso.ibm.com/marketing/mi/compdlib.nsf/weball/9C89AA6AB94F832285257C2C0068654E

Retail Market Assessment Report

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