Washington–The view from the top hasn’t changed much. The same retailers appear in the 2011 Top 100 Retailers compiled by Stores magazine and Kantar Retail, but two up trending companies leaped in the results: Amazon and Apple.
Citing Amazon.com for “its stellar customer service and popular Kindle e-reader,” The Top 100 Retailers reported the online giant jumped from No. 26 to No.19 on this year’s list, as 2010 U.S. sales grew 46.2% to $18.5 billion. Apple Stores climbed more than 30 spots–from No. 52 to No. 21–with 2010 U.S. sales increasing 32.3% to $18 billion.
“One of the keys to retail survivorship in the U.S. is diversity, particularly in the variety of retail footprints that populate the retail landscape,” said Bryan Gildenberg, chief knowledge officer, Kantar Retail. “This year’s top 10 features retailers that operate in six different core formats and that in aggregate run everything from non-store retail to convenience stores to massive supercenters.”
Perennial No. 1 Walmart boasted U.S. sales totaling $307 billion. The company is continuing to look for new growth opportunities by testing several smaller “Express” store prototypes in both rural and urban areas throughout the country.
No. 3 Target, whose sales topped $65 billion last year, is seeking to place smaller units in inner cities and recently completed a revitalization of its PFresh initiative, which added fresh fruits and vegetables to stores across the country. The increase in grocery business may have helped Target perform better than rival Walmart, if only by a small degree.
“Our sales growth is coming from the top half, not the bottom half, of guest households,” says Target’s CFO Doug Scovanner. Shoppers are buying mostly essentials and bypassing more discretionary merchandise, and Target-branded credit cards are contributing to the improved performance as the company reports a sharp drop in bad-debt expenses.
Specialty Apparel Retailers Gain Share
Rounding out the top 10 is Sears Holdings which has reported sales declines every year since merging with Kmart in 2005. This year Best Buy edged ahead of Sears in the listing, too.
Lou D’Ambrosio, the recently appointed ceo, says the company is “taking actions intended to leverage our suite of assets, including extending our leadership position in appliances, capitalizing on the scope of our portfolio and marquee brands … extending our lead in home services, revitalizing our Sears’ apparel business and delivering extraordinary customer experience at the store, online and in home.”
Meanwhile, the Top 100 Retailers report had some good news and bad news for apparel specialty retailers. The “good news for the apparel specialty segment is that it has gained market share in apparel and accessories at the expense of department stores and mass merchants. The bad news is that short-pocketed chains are less able than larger rivals to address the squeeze caused by rising prices on commodities, particularly cotton.”
Specialty apparel stores expanded their share 1.3 percentage points to 32.4%, according to The NPD Group, Inc. Mass merchants’ share dropped to 19.8% from 21.4%, while department stores slipped 0.1% to 13.3%. But the report acknowledges the next year has its challenges: “Apparel retailers face the difficult task of raising prices just as consumers have begun to spend a little more freely. Cotton prices have more than doubled in the past year and are at relative levels not seen since the Civil War, according to the International Cotton Advisors Committee.”
On the department store channel, The Top 100 reports: “a funny thing happened on the way to the department store wake: new signs of life.” Indeed mall-based department store share grew sligthly 2.5%. Macy’s (No.15) continued to lead the channel,
“Even though it was only a tenth of a share point, for department stores, that is a huge change,” says Craig Johnson, president of private equity firm Consumer Growth Partners. “This is a real turn in the market. We’re optimistic that the momentum is just gathering.”
Store 2010 U.S. Sales (000) Sales Growth (’10 v ’09)
1. Walmart $307,736,000 0.6%
2. Kroger $78,326,000 6.4%
3. Target $65,815,000 3.8%
4. Walgreen $61,240,000 6.3%
5. The Home Depot $60,194,000 2.2%
6. Costco $58,983,000 5.5%
7. CVS Caremark $57,464,000 3.5%
8. Lowe’s $48,175,000 2.8%
9. Best Buy $37,110,000 -0.3%
10. Sears Holdings $35,362,000 -2.2%
About the Survey
The Stores Top 100 Retailers are listed by U.S. sales, which may include estimates for private or closely-held companies. Retailers included in the Top 100 either have group headquarters located in the United States or are foreign entities with significant operations in the U.S. market. For retailers with group headquarters located overseas, data is presented for North American operations only. Revenues from major non-retailing operating segments are excluded where data availability allows.
Kantar Retail is a global retail insights and consulting business that works with clients to transform the behavior of shoppers and retailers. Kantar Retail serves the world’s leading retailers and manufacturers and has offices in 15 markets around the globe. By combining the resources of Cannondale, Glendinning, MVI and Retail Forward, the company solves client issues from tactical to strategic. Kantar Retail is headquartered in London and is part of the Kantar Group of WPP.