Wal-Mart tops retail charts

31 March 2011

NEW YORK: Wal-Mart, Target and Home Depot are the world's most valuable retail brands, according to a new study.

Interbrand, the consultancy, has released its latest category rankings, with Wal-Mart leading the way, not least as it attracts 180m American customers, from 80% of residences, each year.

However, Wal-Mart's $142bn (€101bn; £89bn) total contracted 8% annually, as its emerging market growth was offset by falling US same-store sales and the reintroduction of a more "cluttered shopping environment".

"Some of the pricing and merchandising issues in Wal-Mart US ran deeper than we initially expected, and they require response that will take time to see results," Mike Duke, Wal-Mart's ceo, said recently.

"Price leadership is critical to our success ... This is what Wal-Mart was built on."

Target claimed second on $23bn, down 9%, and still suffering from negative price perceptions despite investing considerable effort in altering such opinions.

Several current trends should prove more beneficial, including the return of "impulse purchases", and Target's private label push, new REDcard loyalty scheme and emphasis on smaller stores in urban areas.

"With a great team, millions of loyal guests and one of the strongest brands in retail, we're prepared to thrive in 2011 and for many years to come," Gregg Steinhafel, Target's ceo, said last month.

"Our goal, both today and in the future, is to be our guest's favorite place to shop."

Home Depot took third, up 19% to $20.3bn, after shifting strategy as consumers look to enhance existing properties rather than moving house, and boosting its ecommerce capabilities.

"We're very pleased with the improvement we've seen on online," said Francis Blake, Home Depot's chief executive.

"It's not only a vehicle for selling products ... It's also a vehicle for educating our customers around products and projects."

Best Buy gained 6% and hit $18.8bn, aided by consistent innovation and considerable digital media expertise, while CVS accrued 17% to $16.6bn, having embraced social responsibility, added in-store clinics and deployed mobile apps.

In the European markets analysed, Carrefour topped the charts thanks to a 1% lift, attaining a $13.3bn valuation, and was credited for delivering new formats and rationalising its global portfolio.

"In 2011, we will inject new momentum," said Lars Olofsson, Carrefour's ceo.

"We will accelerate the development of the Carrefour brand and, following the convincing results of our pilot stores, we will roll out Carrefour Planet hypermarkets in five European countries."

Tesco saw a 22% uptick and secured $10.1bn, having expanded its UK activities into telecoms and banking, pressed ahead in Asia, which contributes 33% of the firm's retail space, and pursued green innovation.

"The challenge is to tap into consumer power," Sir Terry Leahy, Tesco's outgoing chief executive, said.

"Encourage consumers to go green, not just by saving energy but buying products with a low carbon footprint - if we can do that, then we will create a mass movement in green consumption."

Zara, part of Inditex, was Spain's premier retailer and logged a 10% surge to $7.5bn, while discounter Aldi, Germany's front-runner, haemorrhaged 14%, registering $3.5bn as a consequence.

Woolworths, the Australian supermarket group, headed the Asia Pacific table on $4bn, beating Uniqlo, the Japanese fast-fashion specialist, which posted $2.6bn.

Turning to China, appliances chain Suning was valued at $489m, apparel network Meters/bonwe generated $401m, and consumer electronics counterpart Gome yielded $208m.

"To maintain our leading position in the industry, we will open more stores and establish large-scale logistic bases in second-tier cities this year," Zhang Dazhong, Gome's chairman, said this week.

"Gome also plans to tap into e-commerce operations with the launching of its own online sales platform in April."

Data sourced from Interbrand; additional content by Warc staff