View the full list of 2021 Top 50 Global Retailers here.
2020 was a year of consternation and confusion as shoppers around the world struggled to find what they needed under circumstances that changed weekly. Counterintuitively for many retailers, it was the best year in their history as shoppers had a range of new needs resulting from working from home and various levels of lockdowns. However, for other retailers, primarily those in malls, urban areas or in countries with strict lockdown orders, it was a year of major sales losses.
These conditions point to a clear challenge in ranking retailers internationally simply based on sales. It highlights the need to use additional metrics to establish movement up or down.
Any comparison of retailers operating in multiple countries is made difficult by currency exchange rates. In addition, retailer rankings are normally created using reported consolidated revenues, which dilute the impact that joint ventures, franchises and marketplaces can have on helping retailers internationalize.
Finally, most retailers generate the bulk of their sales from domestic operations, allowing those with the biggest domestic markets to appear to have the largest international operations, which is not always the case.
Kantar’s 2020 international retailer ranking looks to minimize these challenges and maximize the amount of discussion, debate, education and exploration opportunities the ranking can provide.
The intent is threefold. First, we have minimized the impact of currency exchange rates and domestic market strengths that can distort comparisons over time. Second, we wish to highlight new forms of retail, such as online marketplace platforms and informal retail alliances (where two or more retailers partner to get the most from several countries), and their role in internationalizing retail. Third, as an international comparison, we have removed retailers that operate only locally from the discussion on international strength.
The result is a fresh look at the 50 most impactful international retailers based on their operations at the start of 2020. The methodology uses a system in which points are given to retailers based on their international revenues, their participation in franchising and alliances outside of their local region and their ability to operate through online marketplaces or an omnichannel approach. To qualify for the rankings, retailers needed to have a direct investment in at least three countries, at least one of which is not adjacent to their domestic market.
Keeping within these guidelines, Walmart continues to be the world’s largest retailer, both domestically and internationally, with the highest overall score in the Top 50 ranking. But it is clearly being challenged by Amazon, Alibaba and new Top 10 entrant JD.com, marketplace retailers with massive gross merchandise volume.
Walmart continued to shift its business model to align with a broader omnichannel approach to its markets as it continued expanding into marketplace platforms and services. It still tops the international retailer ranking even though it divested from a number of markets recently: first Brazil, then the United Kingdom, and more recently Argentina and Japan. In the next Top 50, it will likely remain No. 1 but with a smaller lead.
Amazon continues to move into a range of new businesses. The retail group is posting strong growth in its core markets of the United States, Canada and Europe as it expands into other countries. That is reflected in the retailer’s powerful capitalization and cash flow that gives it flexibility to move into new markets and expand its logistics and fulfillment group. It could take over the top position faster by purchasing an international retailer or large regional marketplace outside North America.
3. Schwarz Group
As a privately held firm, the Schwarz Group often misses these rankings, but its grocery formats dominate retail in Europe. Its Lidl discounter banner has been its primary growth vehicle outside the EU, such as in the U.S., but online operations within existing markets are where most growth has occurred to date.
One of the fastest-growing retailers in the U.S. has long been the strongest retailer in Central Europe. Aldi continues to quietly find new markets to expand into, including China. Having survived a generational change in private ownership, the company continues to integrate its global sourcing, international logistics and ecommerce operations. In the past few years, it has also remodeled stores to achieve a higher degree of shopper engagement. Aldi jumped from No. 8 to No. 4 on this year’s ranking and could move up another spot next year.
Alibaba began as a business-to-business marketplace that provided the huge number of Chinese manufacturers with access to global buyers. It has since expanded dramatically into all types of businesses, including retail. Still primarily a Chinese company, Alibaba is moving aggressively into new markets, courting regional manufacturers while extending its financial services. The biggest changes concern physical retailers Hema and Freshippo that rapidly expanded into new markets with larger stores. Its purchase of Auchan RT-Mart’s operations in China made it effectively the largest physical retailer in the market.
Costco continues to quietly move into power positions in markets large and small. It recently became the second-largest retailer in Canada and expanded into Australia and Europe, upsetting stable markets with new shopper expectations. Having finally moved into ecommerce, it is positioned for fast growth in existing markets with its unique value proposition.
7. Ahold Delhaize
As a unified company in the U.S., Ahold of the Netherlands and Delhaize of Belgium have been able to refresh their stores in all banners and start growing again. By offering value shoppers a quality in-store experience, Ahold Delhaize continues to leverage best-in-class online grocery capabilities across the U.S. and in its European markets. The company’s Netherlands-based Bol.com marketplace platform continues to expand non-grocery product shopping across Europe.
Carrefour has resolved ownership and expense issues and is growing once again with franchises in the Middle East and Africa. The Latin American “atacado” format continues to be the retailer’s largest growth engine as smaller express stores expand in all of its existing markets. However, the retailer is a potential mergers-and-acquisitions target, possibly by Canada-based Alimentation Couche-Tard.
Movies filmed around the world clearly show Ikea’s dominance in furnishing homes globally. The Swedish retailer’s practical and affordable DIY furniture sold in blue and yellow big-box stores continues to be a success. And the retailer is now starting to expand into Latin American cities and relaunch its online store to reach new markets.
Rapidly growing and diversifying JD.com continues to surprise even the jaded Chinese market. Emphasizing operational competence and customer service, it partners with a range of international retailers, especially minority owner Walmart. But it has also linked up with much smaller regional companies to offer familiar products to a mobile population. Given its recent moves into bricks-and-mortar along with international expansion, it will continue to be in the Top 10 for a number of years.
Just missing the international cut
A number of retailers that fell slightly short of the Top 10 cut-off will likely challenge for a spot next year. And many have become more innovative and are exploring new business models to compete in the future landscape. Here are some examples to consider for new ideas and new ways to generate excitement in retail.
Five retailers at the top of the next 10 have not changed position dramatically in the last year but are also in highly competitive home markets. These retailers, including Walgreens Boots Alliance (No. 11) and The Home Depot (No. 15), are creating new ways to engage shoppers with new omnichannel solutions and investments in integrating in-store and online queries.
Auchan (No. 12) continues to operate successfully in Russia though it sold its China holdings to Alibaba and exited Vietnam and Italy. 7-Eleven global licensing owner Seven & I Holdings (No. 13) and Spar International (No. 14) run area-franchise models where much of the “work” to internationalize its operations is done by partner retailers. These partners hold any revenue and profit generated and reinvest it in local operations.
The Rewe Group of Germany fell to No. 16 in 2020. Rewe is largely managed by an association of independent German retailers that has been reluctant to venture too deeply into international retailing and has had mixed success when doing so.
Tesco (No. 17) and Metro AG (No. 21) also continue to fall in the rankings as they shrink relative to the competition in their home and international markets. Casino (No. 22) has splintered into different regional groups, finding stronger growth in Latin America.
South Africa’s Naspers (No. 29) is more of a new technology holding company that has invested in pure-play platforms for classifieds, payments, fast-food delivery, marketplaces, travel, education and social media. Its most famous investments go by the names of Delivery Hero, eMAG (Eastern Europe’s largest online portal), Flipkart (India’s largest online portal) and Takealot (South Africa’s largest online portal).
Tencent owns no retail unit of its own but enables other industries, including retail partners JD.com and Walmart along with thousands of small startups on social media. Rakuten (No. 37) and eBay (No. 38) continue to innovate well beyond their original business models into new retail initiatives and international markets.
Retailers that continue to surprise their markets
McDonald’s (No. 33) and Starbucks (No. 40) continue to surprise the market by introducing new store formats, adding in-store automation and integrating online retail and financial technologies. Both have found new expansion opportunities in transit locations, corporate campuses and third-party delivery partnerships.
TJX (No. 27) continues to create new discount-themed stores and rapidly introduce them into global markets. Japan’s Fast Retailing (No. 37) has found new markets for its line of “technical clothing” that has generated brand loyalty among a diverse shopper base.
A number of regional retailers should be noted for operational excellence, including home improvement companies Lowe’s (No. 24), Adeo Group (No. 28) and Kingfisher (No. 41). Electronics specialists such as Media Markt/Saturn parent company Ceconomy (No. 32), Best Buy (No. 34) and Euronics (No. 49) continue to operate successfully in a tough channel that competes directly with local and global pure-play online companies.
The mixed-format Japanese retailer Aeon (No. 20) has adjusted to the changing consumer in that country while appealing broadly to the Chinese retail tourism segment. Convenience continues to grow and expand led by Seven & I with global franchise Circle C owner Couche-Tard of Canada (No. 35), FamilyMart UNY (No. 36) and Japan’s Lawson (No. 50). Small convenience drugstore chains A.S. Watson (No. 25) and Hong Kong-based Dairy Farm (No. 43) continue to create new formats for the urban Asian market.
The 2021 ranking promises even more changes as retailers adjust to shoppers emerging from lockdowns and into new economic conditions. Advancements that integrate in-store digital technology and shoppers’ homes are expected to be a major competitive differentiator. And omnichannel competency will be a given for most as shoppers of all income levels across markets demand more online and in-store integration. Next year’s evaluations will be based more on meeting local needs with global strategies and execution while exploring new shopper services.
To qualify for this year’s rankings, companies had to meet several criteria. Both publicly and privately owned companies were considered, and the businesses reviewed between October and December 2020.
First, the company needed to be a retailer, defined as either a goods-for-consumer resale operation or a restaurant business open to the public. Second, the company must have direct selling operations in at least three countries, one of which must not be an adjacent territory to the retailer’s home country. Offshore tax havens, territories and protectorates are disqualified from consideration as a country. Third, when reviewing franchise operations, the company must hold the global license to franchise the store name in the majority of countries where the franchise operates.
The review process looked at three elements of business models, with international direct selling capabilities qualifying as the first point of review. Where reported, teams took the size of the company’s international retail sales for the most recent 52-week filing period, in the currency provided, and converted the figure to U.S. dollars. Currencies were converted using the International Monetary Fund rates database. Generally speaking, reviewed annual filings were published between March and September 2020.
The second point of review was company franchise sales, where other retailers had been granted the right to run the franchise. Where the franchise sales value was reported, often called total systemwide sales, we took this figure and applied the same currency exchange rate methodology as in the first review. When the systemwide sales were not reported, we took the values from the reports provided by area franchisees.
The third point of review was marketplace sales and sourcing alliances. Marketplace sales are those where the retailer provides the digital platform (website, mobile app or voice-ordering system) and assists shoppers with delivery options but will allow a large number of sellers to list products on the platform.
Many companies that operate marketplaces report gross merchandise volume (GMV); where this was reported we took the number. In instances where it was not reported, we estimated the value based on daily website traffic and other metrics. When reviewing sourcing alliances — where two or more retailers purchase goods from a wholesaler together or create private label products together — we looked at the size of the partner retailers in the alliance.
After looking at all three elements, we created a points system giving the most points to retailers with international direct selling, a lower number of points to retailers with international area franchise agreements and a limited number of points to retailers using marketplaces or buying alliances to generate international scale.
Sources for this year’s report included annual reports, public filings and press statements as well as consumer research on shopping patterns. Much of this data is collected by a global team of analysts who work throughout the year on the estimates. This information is shared with subscribers to Kantar’s online platform for retail performance data, kriq.kantarretailiq.com.