Which retailers are best positioned to be successful in the future? In alphabetical order these may well be the ones that will be making the industry’s headlines in the coming months.
Elsevier Food International, Vol. 7 Number 3, September 2004
Bryan Roberts

AEON (17)
This diverse business finally achieved market leadership in Japan last year (in net sales terms) and is set to continue its pattern of absorbing struggling Japanese retailers such as Mycal. The company has also earmarked strong expansion for its domestic hypermarket arm and has established a credible Asian presence in grocery retailing. Its aim of becoming a top ten retailer by 2010 is eminently achievable.

Albertsons (13)
Despite being limited so far to food and drug retailing activities in the competitive US sector, Albertsons harbours aspirations of becoming a global giant in its field. The recent takeover of, Shaw’s and its plans to launch a ‘price impact’ format in the States show that it is has regained some growth momentum and a move beyond US borders should not be ruled out.

Aldi (10)
The Aldi group is both the inventor and godfather of hard discounting and continues to be the undisputed leader in its segment, despite the fast growth displayed by Lidl. With over 7,000 outlets in Europe and the USA, and just under 4,000 in Germany, the company has reshaped the European grocery retail sector and is also influencing new markets such as Australia. Expansion continues at some 300 outlets per year.

AS Watson (62)
A major food and drug retailer in Hong Kong and China, AS Watson has boosted its global credentials with the recent acquisitions of drugstore activities in Europe and it has an option to acquire a 40 per cent stake in Germany’s Rossmann. Further M&A activity is on the cards.

Carrefour (2)
Despite recent trials and tribulations in its domestic hypermarket division, Carrefour has positioned itself as one of few players poised to be a truly dominant world player at the end of this decade. Its market leadership in several core European markets will underpin ongoing global multi-format expansion.

Costco (9)
One of very few thorns in Wal-Mart’s side in the US, Costco continues to impress with its strong performance and high quality of execution. International expansion has been relatively modest, but opportunities in Australia and mainland Europe are being explored.

Couche-Tard (75)
Now a major player in North American c-store retailing thanks to a series of deals culminating in the acquisition of Circle K in 2003. Its sophisticated take on the convenience concept will see it drive up sales from the vast Circle K chain, and further acquisitions in Canada and the US cannot be ruled out.

CVS (23)
Although still in the shadow of its larger rival Walgreens, CVS will be bolstered in 2004 when it picks up over 1,250 Eckerd outlets from JCPenney. A swift store conversion programme will boost its presence in the southern US states and will see it close the significant gap between itself and its larger rival.

Dairy Farm (89)
Having shed non-core grocery retail businesses in Australia and New Zealand in recent years, Dairy Farm has emerged a leaner business intent on fulfilling its undoubted potential in key Asian markets. The business already has a decent presence in the Indian grocery market, which could be a springboard for considerable growth in the future.

Dollar General (59)
Opening over ten stores per week, Dollar General is the leading exponent of the dollar store phenomenon in the US. It will finish this year with nearly 7,400 outlets and, with its expanding grocery ranges, the chain will become increasingly important for shoppers and suppliers alike.

Lotte (55)
The market leader in South Korea, Lotte has used a compelling mix of innovation and robust expansion to fend off both domestic and international competitors. The company is looking to enter Russia in 2006 and is aiming for sales of US$13 billion by the end of the decade.

Mercadona (56)
Mercadona is one of the fastest-growing mainstream supermarket operators in Europe and is taking the fight to Carrefour in its domestic market of Spain. For a family-owned company with a young history, its rate of growth has been breathtaking and expansion into northern parts of Spain will see it attain a national presence.

Metcash (60)
While not the biggest or the most rapidly growing of companies, Metcash is certainly worth keeping an eye on not least because it recently promised investors a sizeable international acquisition. It has a very strong presence in Africa and is a challenger to the market leaders in Australia. Its combination of wholesale and retail activities will stand it in good stead for most emerging markets.

Metro Group (4)
One of the largest retail groups in the world but also proving itself to be one of the more flexible and adventurous. It has blazed a trail with its cash & carries into new European and Asian markets ahead of other Western retailers and is also successfully exporting its electrical goods format into a variety of new markets. Its food retail activities are enjoying something of a renaissance.

Morrisons (51)
After a protracted takeover process, Morrisons has begun the work of absorbing the larger (but weaker) Safeway (36) in the UK and, despite initial problems, should successfully integrate the business within two years. The combined company will be a force to be reckoned with in the already competitive UK sector and should face little challenge from Sainsbury’s as it seeks to challenge Asda and Tesco for market share.

Musgrave (85)
Irish-based Musgrave, which already enjoys market leadership at home, has aggressively carved out a substantial presence in the UK through the takeover of Budgens and the impending absorption of the Londis network of independent retailers. This will not impact net sales in a major fashion, but will lead to greater banner sales and significantly mightier buying power.

Publix (32)
A retailer that is highly-regarded by many for its innovation, merchandising and customer services, Publix has managed to fend off the challenge of Wal-Mart and avoided the parlous problems of local rival Winn-Dixie. Its rapid growth rate in terms of store numbers could be given a shot in the arm if Publix can pick up some or all of the Bruno’s and Bi-Lo stores that Ahold has put up for sale.

Rewe (8)
Following its slow but unstoppable transformation from a German independents’ buying organisation to a pan-European retail conglomerate, recently-appointed chairman Ernst Dieter Berninghaus looks set to oversee further sustained international expansion (it recently entered Russia) and continued modernisation at home.

Schwarz Group (14)
Where once Aldi was seen as the unassailable leader in hard discounting, the Schwarz Group’s Lidl banner is gaining ground at a rapid rate. Lidl’s rate of store openings, sales growth and new market entry could eventually see it challenge Aldi for European leadership.
Furthermore, the Kaufland hypermarket concept is proving a useful format in Eastern Europe. A recent withdrawal of plans to open in Canada indicates that its enthusiasm is tempered with caution.

Soriana (91)
In the bloodbath that is the Wal-Martdominated Mexican grocery sector, Soriana has done well to consistently achieve steady growth in stores, sales, profit and market share. The retailer’s growth into new geographic markets and the launch of new formats should see its progress continue, especially with the backing of the new Synergy buying group behind it.

Supervalu (44)
With a strong background in both wholesale and retail, Supervalu oversees a broad variety of retail formats, ranging from the beige’s hypermarket concept to the Save-A-Lot limited assortment discount format. It is the Save-A-Lot  chain that is forging ahead at the moment, although other regional operations like Shoppers Food Warehouse are also gaining traction.

Tesco (6)
Likely to overtake Kroger in the rankings in 2004/05, the UK’s Tesco has escaped the crowded UK market where its long-term dominance appears under little threat to assemble a convincing stable of retail businesses in Asia and Eastern Europe. Recent entry into markets such as Japan, Turkey and China underscore Tesco’s drive to become a genuine global player. Speculation has linked the group to a variety of markets including Australia, India and the US, and more market entries appear something of a foregone conclusion.

Walgreens (15)
With a resurgent CVS breathing down its neck, US drugstore market leader Walgreens’ may face a stiffer challenge in the years ahead, but its inherent performance is still one of consistent growth and improvement. An impressive store base (set to reach 7,000 by 2010) and increasing skill at grocery and GM merchandising will see it make further incursions into supermarket territory. Walgreens is one of several US retailers for which major overseas expansion has been mooted.

Wal-Mart (1)
Wal-Mart’s scale is founded upon its aweinspiring domestic operations, although its activities in Canada, Mexico and the UK prove that it is more than capable of mounting an extremely credible challenge in a variety of international markets. Despite activities in Germany proving that the Bentonville giant is a fallible creature, Wal-Mart will not be dissuaded from further international growth. Recent entry into Japan has been one of cautious partnership and the world leader has been linked with moves into markets as diverse as France, Hungary, Australia, Poland, India, Russia, Spain and Chile.

Whole Foods Market (97)
Something of a niche player that specialises in organic and natural products, WFM has capitalised on favourable consumer trends and its exemplary store designs and merchandising to generate a tremendous growth story. Organic expansion into Canada was followed by an acquisitive venture into the UK - a move the company admits could be the precursor to a more extensive push into Europe.