Companies from the United States dominated the top 10 global retailer list that business services firm Deloitte incorporated into its Global Powers of Retailing 2023 report.
In addition, the report includes an analysis that suggests at least some economic strengthening in the United States and Europe in the second half of 2023.
Germany is represented as well, in this case by Aldi in its double designation, Aldi Einkauf GmbH & Co. oHG and Aldi International Services GmbH & Co. oHG, and the Schwarz Group, which operates Lidl. However, a China-based operation, JD, was the biggest mover.
None of the top six retailers changed in rank year over year, but JD.com jumped into seventh position as Walgreens Boots and Aldi each slipped one place, and Target Corp. hung on at the bottom of the list.
The Deloitte listing, with the company’s determination on retail sales, is:
- Walmart, $572.8 billion
- Amazon, $239.2 billion
- Costco, $195.9 billion
- Schwarz Group, $153.8 billion
- Home Depot, $151.2 billion
- Kroger, $137 billion
- JD, $126.4 billion
- Walgreens Boots, $122 billion
- Aldi, $120.9 billion
- Target, $104.6 billion
Deloitte pointed out that the top 10 sales are 34% of those posted by the top 250 retailers.
In an analysis of the year ahead, Dr. Ira Kalish, chief global economist, Deloitte Global, made several observations including that inflation should recede after already peaking in the United States and looking to peak soon in Europe. Factors driving prices up including supply chain disruption, increases in commodity prices and expansive fiscal and monetary policy reversing are likely to abate. Inflation has already peaked in the United States and may soon peak in Europe even if it remains moribund in Japan and China.
Supply chains should stabilize given weakening global demand combined with increased capacity to produce and distribute manufactured goods. Still, tensions between China and the United States may lead many companies to diversify supply chains as a hedge against political risk. Outflow from China could mean more investment in Southeast Asia, India, Central Europe and especially Mexico.
Labor markets should remain tight. Reduced labor force participation, continued COVID-19-related illnesses, and a sharp decline in migration will all play a role. Still, despite tightness in the labor market, wages have failed to keep pace with inflation in most advanced economies, with the result being weaker consumer spending. In 2023, as inflation recedes, wage growth will likely exceed inflation, which should boost consumer spending and may put pressure on businesses to accelerate investment in labor-saving technology, Kalish stated.
Central banks should stop tightening even if they continue to raise rates in early 2023. They will likely start to reduce rates in 2024.
The United States may avoid recession. Despite declining real wages, real consumer spending has grown as some consumers have accessed their savings. Business investment has grown as many businesses have dipped into their cash reserves and focused on the longer term. Housing is the only major sector to experience a sharp contraction, largely due to higher mortgage interest rates.
U.S. growth in 2023 may be slower than in 2022 due to tightening monetary and fiscal policy. Yet declining energy prices, strong employment growth and easing of supply chain stress should weigh against a recession.
China may rebound modestly with the relaxation of pandemic-related restrictions. However, COVID-19 outbreaks have not altogether receded, and the economy faces threats from weaker global demand, a problematic property market, an outflow of capital by global businesses and a difficult relationship with the West, which opposes many of the countries’ international and military initiatives.
Meanwhile, Japan should stabilize with pandemic restrictions on movement decreasing and pent-up demand increasing. Until the global economy picks up, though, Kalish says the gains aren’t likely to be large as the company’s export economy suffers from lower global demand and the country itself confronts inflation.
India should see strong economic growth as it becomes the most populated country in the world, likely surpassing China in the spring. While India’s population has been growing and China’s isn’t, which denies it an internal economic driver. India is currently one of the fastest-growing major economies in the world. It is importing relatively affordable oil from Russia, thereby helping to limit the impact of the energy shock on its economy. Trade as a share of GDP is lower than in most countries, which should shield India from the negative consequences of a relatively sluggish global economy. And the rate of inflation, although relatively high, has fallen recently, Kalish pointed out.
