Two Australian businesses on list of global retail’s largest: Are we punching above our weight or underachieving?

Two of Australia’s largest retailers have been listed among 20 of the industry’s biggest global players, but local pundits say more home-grown businesses should be leading the pack.

The fact only Woolworths and Wesfarmers are in the top 20 demonstrates a lack of support for retail, suggests the Australian Retailers Association – but some experts have a different view.

David Gordon, executive director of corporate advisory Bentley’s, says Australia simply doesn’t have the population to support more than two entrants on the list, and the businesses expanding overseas are more in the SME category.

“You don’t become a force in the retail world by servicing 22 million people. If you look at the two that have made the list – they don’t even have extensive retail operations overseas.”

The Deloitte list of the world’s most powerful retailers placed Woolworths and Wesfarmers in the top 20, in 17th and 18th place respectively. The list, once again, placed Walmart in the number one spot, followed by Carrefour in France and Tesco in Britain.

The Global Powers of Retailing 2013 report cited massive change in the industry, warning businesses about the changing nature of consumer behaviour.

“The collision of the virtual and physical worlds is fundamentally changing consumers’ purchasing behavior,” it said.

“Consumers are seeking an integrated shopping experience across all channels and they expect retailers to deliver this experience.”

The report mentioned a number of pressures on business, including the shift towards mobile devices and shopping apps. Those businesses which can embrace rather than shun these trends will be successful, it said.

But the Australian Retailers Association has said the report exposes a lack of support for local businesses.

Executive director Russell Zimmerman says the dominance of international retailers in the top 20 shows how overseas competition is threatening local players.

“Conducting business seamlessly across both physical and virtual channels has exposed Australian retail not just to competition from overseas but also to overseas entrants marketing their offers directly via new, Australian-based brand outlets.”

The ARA has once again renewed its call for the government to drop the level of the low-value import threshold.

“These changes will ensure Australian retailers are able to compete on a level playing field as well as achieve growth.”

But David Gordon says the lack of Australian retailers in the top 20 shouldn’t lead to any conclusions about poor growth. On the contrary, he says, there are plenty of retailers expanding overseas – they just aren’t large ones.

“The ones that are expanding are companies like Country Road, Cotton On and Forever New. These are businesses – off the top of my head – that are moving overseas.”

“So is this list an indication of issues in retail? No, it’s an indication of how difficult it is for an industry with a home-base of 22 million to support international growth.”

Gordon said most successful retailers are SMEs, which are the companies which should investigate international growth.

“Will we ever see more entries at the top end of this list? I think it’s doubtful.”

The Deloitte top 10:

1. Walmart (United States)
2. Carrefour (France)
3. Tesco (Britain)
4. Metro (Germany)
5. Kroger (United States)
6. Costco (United States)
7. Schwarz (Germany)
8. Aldi (Germany)
9. Walgreen (United States)
10. Home Depot (United States)



Notify of
Inline Feedbacks
View all comments