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Amazon’s 18% Revenue Growth Fuels Rise on Deloitte Global Retail List

Walmart Stores Inc. and Costco Wholesale Corp. topped Deloitte’s list of the top 250 global retailers, with rival Amazon.com Inc. rising into the No. 3 spot.

Strong sales growth helped Walmart, Costco and Amazon cement their dominant positions on the compilation for fiscal year 2018, the most recent year in which all publicly disclosed data is now available, according to Deloitte’s Global Powers of Retailing 2020 report.

Amazon’s move up to third place displaced supermarket chain The Kroger Co. down to fifth place, which also saw Germany firm Schwartz Group ascend to fourth place. Walgreens Boots Alliance Inc. moves up one spot to six, moving The Home Depot Inc. down a notch to seventh. German firm Aldi Einkauf GmbH & Co., CVS Health Corp. and Tesco PLC rounded out the list.

Target just missed joining its seven American peers on the Top 10 list, reaching 11th place instead.

Walmart’s ranking included year-on-year retail revenue growth of 2.8 percent, fueled by record growth in comparable store sales in the U.S. E-commerce as part of the discounter’s omnichannel strategy–including a $5.4 billion investment in fiscal year 2018–led the growth in sales in the channel by 40 percent.

Costco in the same period posted revenue growth of 9.7 percent versus the prior year, buoyed by 21 new warehouse openings, and increases in “customer traffic, shopping frequency, and average ticket size,” the Deloitte report said.

Amazon’s jump to third place included the highest retail revenue growth among the Top 10 retailers, at 18.2 percent in the same period. It saw higher sales in North America and Germany, and the impact from its acquisition of Whole Foods Market. During fiscal year 2018, Amazon acquired online pharmacy PillPack, added more than 8 million square feet of fulfillment center space for its online grocery operations and said it planned to increase its air fleet of cargo jets by 25 percent to support Prime deliveries.

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The Deloitte findings are based on global firms that operate in an average of 12.8 countries. That’s compared to 10.8 countries for the firms that made the Top 250 ranking.

For firms that made the Top 250 list, Europe has the highest number companies–88–based in the region. And 68 percent of the Top 250 have foreign operations. The Top 250 ranking did not include information on the prior year’s placement, or which firms may have been new to this year’s list.

Some of the European fashion firms that made the Top 250 were LVMH Moët Hennessy-Louis Vuitton S.A. (number 27); Inditex S.A. (33); H&M Hennes & Mauritz AB (43); El Corte Inglés S.A. (65); Kering S.A. (84); Compagnie Financière Richemont SA (96); Adidas Group (136); Zalando SE (166); Hermès International SCA (178) and Next plc (200).

Some of the U.S. firms in the fashion space that made this list include: The TJX Cos. Inc. (26); Macy’s Inc. (41); Kohl’s Corp. (54); Nordstrom Inc. (62); Ross Stores Inc. (66); L Brands Inc. (78); Nike Inc. (88); J.C. Penney Co. Inc. (90); Dillard’s Inc. (170); Tapestry Inc. (189); Neiman Marcus Group (210) and American Eagle Outfitters Inc. (246).

The minimum retail revenue required for entry to the Top 250 list is $3.9 billion, with the average at $19 billion.

The Deloitte report also took a look at the outlook for the global economy and the retail industry in 2020. And while overall economic growth is seen as remaining positive, the retail sector’s outlook  remains “uncertain.”

Lower expectations for consumer spending and inflation remaining low in most countries are both expected to help overall economic growth stay in the positive zone, even if somewhat subdued. But when viewed from a retail lens perspective, the unknowns surrounding China’s coronavirus outbreak cloud the forecast.

Growth in the global retail sector has been on the decline. On a currency-adjusted composite basis, growth for fiscal year 2018 for the top 250 firms was up 4.1 percent to $4.74 trillion, but that was slower than the 5.7 percent growth rate to $4.53 trillion achieved in fiscal year 2017.

The top 250 global retailers were identified based on publicly available data through June 30, 2019.