New data from Euromonitor International shows that companies from Asia-Pacific and Latin America appear prominently in the top 10 list of fastest growing grocery retailers.
Latin American retailers claim top positions
Among the world’s 80 largest grocery retailers, Chilean-based Cencosud and Mexico’s FEMSA appear in first and second positions respectively in the list of the fastest growers over the 2004-07 period. This reflects the dynamism of grocery retailing in these markets, accompanied by the greater popularity of modern retailing formats such as supermarkets and hypermarkets in these two markets compared to independent and specialist grocers.
Strong growth for South Korea’s hypermarket operators
The South Korean grocery retailers Lotte and Shinsegae, which both rank among the 10 fastest growing global retailers, were driven by a rapid increase in sales through hypermarkets in their domestic market, reflecting the rising popularity of out-of-town shopping. In addition, these two retailers benefited from the exit of Carrefour and Wal-Mart from the South Korean market in 2006, thus increasing their share of hypermarket sales.
Expansion driven by acquisitions
Most of the fastest growing grocery retailers saw sales benefiting to a great extent from acquisitions. In addition to rapid organic growth, Chilean-based retailer Cencosud also expanded as a result of the acquisition of the Disco supermarket chain in Argentina.
The Canadian supermarket operator Metro saw its sales boosted by the purchase of Tengelmann’s A&P chain in 2005, although its eponymous supermarket chain also succeeded in expanding organically. Among US grocery retailers, Supervalu’s performance was strengthened by the acquisition of some of Albertson’s stores in 2006.
Multinational players from emerging markets the future stars
Grocery retailers based in emerging markets are likely to continue to record the strongest performances, especially those continuing to expand aggressively across neighbouring markets, for example Cencosud in Brazil and Peru, as well as Lotte, which ventured into China in late 2007.
Of the players based in developed markets, those operating in the most dynamic channels such as convenience stores, discounters and hypermarkets will continue to fare well.
|Top 10 fastest growing grocery retailers|
|Retail sales excl tax (US$)||2004-2007 CAGR (%)|
|FEMSA (Fomento Economico Mexicano SA de CV)||28.1|
|China Resources Enterprise Co Ltd||24.7|
|Shinsegae Department Store Co Ltd||23.2|
|IGA Inc (Independent Grocers Alliance)||22.0|