Wal-Mart is tops ----with sales exceeding the combined sales of the second, third and fourth largest retailers in the world ... Although US retailers tend to be the biggest, European retailers tend to be the most cosmopolitan ... Japan's large retailers achieve low positions in the world's ranking. These are some of the findings drawn from the world's top 100 retailers list for 1999. Dr Ira Kalish reports.

It is no surprise that US-based Wal-Mart dominates the list of the world's top 100 retailers, ranked by 1999 sales and measured in US dollars. What is notable, however, is the fact that Wal-Mart's sales exceed the combined sales of the second, third and fourth largest retailers in the world. In other words, Wal-Mart is huge.

In part, this is due to its acquisition last year of Asda, the British supermarket chain. But Wal-Mart has also grown spectacularly by expanding the number of stores in the US and by improving the performance of existing stores. After all, only 14 percent of Wal-Mart's sales in 1999 took place outside the US.

The world's second largest retailer is now France's Carrefour, replacing Germany's Metro which dropped to fourth place. Carrefour arrived at second place largely as a result of its acquisition of French retailer Promodes. Metro, on the other hand, has been divesting many assets and becoming a more focused organisation.

France's Carrefour is now the world's second largest retailer.

Of the 10 largest retailers in the world, seven are based in the US. Yet only one of those seven has a presence outside of North America. The rest are principally focused on their large home market. The largest non-US retailers, however, tend to be quite global. This reflects the fact that, with the exception of the US and Japan, achieving considerable scale cannot easily be accomplished in a single market. It also reflects the fact that, in Europe, and especially in France, retailers cannot easily grow in their home markets due to regulatory restrictions on large store development. So they have a strong incentive to invest in new markets. The result is that, although US retailers tend to be the biggest, European retailers tend to be the most cosmopolitan. While most of the very largest retailers are food, general merchandise, or diversified sellers, the fifth largest retailer is a speciality player. Home Depot, the US-based DIY retailer, is now bigger than all but four of the world's retailers. Moreover, over 96 per cent of Home Depot's sales take place in the US. If, as expected, the company makes a major push into Europe, perhaps by acquisition, it has the potential to become considerably bigger.

At the same time, we are witnessing a continuing trend of divestment by diversified retail conglomerates. Consider two of Germany's venerable players, Metro and Tengelmann. Both have been actively shedding non-core businesses and are expected to do more of the same. Interestingly, both companies own DIY retail chains that could be acquired by Home Depot or Britain's Kingfisher.

The end result of this process will be a small group of very large speciality chains and a smaller number of diversified retailers. Indeed, expect US-based speciality chains other than Home Depot to become active pursuers of European market share.

Another interesting aspect of the 1999 list is the low position of Japan's large retailers. The largest, Ito-Yokado, ranks 16th on the list of the world's

Ito-Yokado, although Japan's largest retail player, is 16th an the list of the world's largest retailers. The next biggest Japanese retailer is Daiei, which is ranked 20th. Moreover, Japan's retailers are barely growing. This not only reflects the poor condition of the Japanese economy, but also reflects the poor performance of Japanese retailers outside their home market. While European retailers are expanding rapidly in Asia, Japanese retailers are either retrenching or, at best, standing still.

Daiei, the second largest Japanese

Notably, the threshold level of sales, necessary to join the top 100 list has been declining since 1996. In 1999, a retailer had to have sales in excess of US$4.37 billion in order to be a member had been US$4.6 billion in 1996. This decline reflects the fact that several large retailers acquired other large retailers. This afforded smaller players an opportunity to join the group.