GENERAL RETAIL

sector Overview:

Shopping was the 20th century consumer experience. The advent of the supermarket and the one-stop shop transformed the dynamics of the food and general retail sectors. Pioneered by the likes of Carrefour and Wal-Mart, the advantages of scale and choice were clear. Securing large volume discounts allowed retailers to under cut traditional stores and greater space meant they could offer as good if not a better selection of produce. In recent years issues such as out-of-town planning constraints have led to a move towards sector consolidation; opening of smaller stores within communities, the incorporation of in-store pharmacies, post offices and travel agencies, joint ventures with oil companies to open forecourt stores and the growth of on-line shopping.


ONES TO WATCH

Tesco, the UK’s largest retailer, continues to dominate its home market through customer focused innovation and is using this success as a springboard to further international expansion.

Wal-Mart, the world's largest retailer, which plans to hire an extra 150,000 staff in China over the next five years as it boosts its presence in this fast-growing retail market. 

In addition, the rise of own-label products and an increasing level of migration from food to non-food have fundamentally changed the product mix and how the consumer therefore views the varied brands. The success of George, a low-cost fashion label set up by and available only through Wal-Mart-owned stores, is a classic example. As national market share becomes more difficult to build, international expansion by the likes of Wal-Mart, Ahold, Carrefour and Tesco is increasingly turning such national retailer brands into global ones, so key challenges include managing increasingly complex supply chains, building critical volume in different countries and maintaining comparable levels of product quality and customer experience.

 

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