Retail sector globally grows despite tough times

PETALING JAYA: The top 250 global retailers generated aggregated revenues of US$4.31 trillion (RM19.1 trillion) in the fiscal year 2015, representing a composite growth of 5.2%, according to the Global Powers of Retailing 2017: The Art and Science of Customers Report from Deloitte Global.

“Slow economic growth in major developed economies, high levels of debt in emerging countries, deflation or low inflation in rich countries and a protectionist backlash against globalisation were among dynamics which contributed to a challenging economic environment for retailers and yet people still need to shop, so the industry carries on.

“In some places and with some cohorts of shoppers, the outlook for retailers is favourable,” Deloitte Global chief economist Dr Ira Kalish said.

For the third year in a row, revenue growth for the top 250 apparel and accessories retailers outperformed other product sectors.

According to the report, historically, this category of retailers has also been the most profitable, and fiscal year 2015 was no exception.

However, the report also stated that retailers of fast-moving consumer goods (FMCG) are, by far, the largest companies with an average retail revenue of nearly US$21.6bil (RM95.7bil) as well as the most numerous, with 133 retailers accounting for just over half of all top 250 companies and two-thirds the revenue.

According to the report, the level of retail globalisation appears to be at the same level as the previous year, with two-thirds of the top 250 retailers operating outside their home country borders with operations in more than 10 countries and deriving nearly one-quarter of their composite retail revenue from foreign operations.

Global Powers of Retailing 2017 also discusses the art and science of customer engagement in order to help retailers design fresh experiences enabled by the right technology, and strengthen customer loyalty.

“What was once considered futuristic is now table stakes. Retail innovators know technology is no longer supplemental to the shopping experience, it is fundamental.

“Technology alone, however, is not enough. Customers are seeking new and surprising products and experiences,” the report stated.