Fastest 50 Pursue Multiple Paths
Profitable growth is the mission of every retail company, but there was no single pathway to this goal among the 50 fastest-growing retailers in 2009. Aggressive organic growth, particularly in emerging markets, acquisitions and a focus on high-growth products, consumer segments, formats and channels all contributed to double-digit sales growth for the Fastest 50. Between 2004 and 2009, composite sales increased at a compound annual rate of 19.9 percent, more than three times the pace of the Top 250 overall.
This group was not immune from the recession, however. A number of companies struggled to maintain their aggressive growth trajectory in 2009, and eight recorded a decline in year-over-year sales. Still, all 39 of the companies that disclosed their bottom-line results were profitable. Moreover, the composite net profit margin for the 50 fastest-growing retailers (4.5 percent) exceeded that of the Top 250 (3.1 percent).
Among those retailers new to the ranks of the Fastest 50 in 2009 is the U.K.’s Co-operative Group. The supermarket operator completed the acquisition of Somerfield in March 2009, boosting its compound annual growth rate to 16.6 percent over the 2004-2009 period. Adapting to a more frugal consumer, Coach, a leading American designer and marketer of handbags and accessories, adopted a new pricing strategy and created less expensive product. This contributed to the company’s recent strong growth in a weak retail environment and a five-year compound annual growth rate of 27.5 percent. As a result, it appears on the list of the Top 250 Global Powers for the first time.
Grupo Chedraui, a Mexican hypermarket and supermarket operator, is also a Top 250 newcomer and a member of the Fastest 50. From 2005 to 2009, the company more than doubled its store count by opening or acquiring 94 new stores (including 29 from Carrefour in Mexico and seven from Grupo Gigante in the United States). In 2010, the company used proceeds from its recent IPO to purchase Los Angeles-based Fiesta Foods, expanding its reach to the Hispanic market in the southwestern United States.
Retailers in fast-growing geographic markets also are well represented among the Fastest 50. Included are five of the eight Top 250 retailers comprising the Africa/Middle East region and four of the five Chinese companies.