America's Top Retailers
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A recent study by Deloitte outlines the top 250 international retailers, which in 2010 had aggregate sales of $3.94 trillion, a figure with is comparable to the total GDP of either India or Japan. Not surprisingly U.S based companies accounted for nearly one-third of total firms, while Japanese corporations comprised slightly over 15% of the total.
Wal-Mart (NYSE: WMT), naturally was the top retailer on the list with total annual sales greater than the next 4 top retailers combined. Toward the bottom of the list one finds American retailers such as Abercrombie & Fitch and The Golub Corporation, a private company that offers such services as a hotline for cooks who answer food related inquiries.
With unemployment reaching post-recession lows and other macroeconomic indicators (Consumer Credit Reports, Business Outlook Survey, Retailer Sales Report and Industrial Production) pointing toward a strong recovery, bulge bracket retailers are in a position to prosper from an energized consumer. According to the most recent report by the International Council of Shopping Center, retail activity picked up by a solid 4.8% in January. The top American retailers have been showing signs of improved activity and are an ideal safe investment for those bullish on the continued retail trend.
With 9,700 locations Wal-Mart recorded sales of $419 billion in the fiscal year and currently employs over 2 million workers. In a recent press release, the top international retailer announced that it will be undertaking at least 73 new major projects in Canada in the upcoming 12 month period, investing over $750 million in what will be its record expansion year within the country. Over the last year Wal-Mart shares have jumped 12%.
Although 5th on the aggregate list, The Kroger Company (NYSE: KR) ranks as the second largest retailer in the U.S with sales of $82 billion. The company operates approximately 2,500 supermarkets and various department stores under multiple banners. The Kroger Company employs 338,000 employees and is expanding into multiple new consumer markets such as convenience stores and fine jewelry locations as well. Over the last 12 months its shares have returned 5% to shareholders.
Costco (NASDAQ: COST) generated 2010 sales of $78 billion; although the 2011 sales reached $89 billion other companies, particularly Kroger, have not released their year-end financials yet and thus cannot be fairly compared. With 598 warehouses across 9 countries, Costco employs over 161,000 associates. The bulk discount retailer realizes exceptional shopping volume with the average store generating annual sales of $140 million. Within the last year, share prices appreciated by 12%.
After share prices plummeted in 2009, The Home Depot (NYSE: HD) has been quickly recovering and has seen its stock surge by 22% over the last 12 month period. Home Depot generated healthy 2010 sales of $68 billion, ranking 8th on the list, right behind Costco, but 4th in terms of U.S. based companies. The home improvement retailer operates 2,200 stores which employ a total of 321,000 workers.
Immediately following Home Depot, Walgreen Company (NYSE: WAG) caps off the top 5 U.S retailers with annual sales of $67 billion, surpassing Target by $2 billion. In contrast to the other retailers on this list, Walgreens shares have fallen by 18% within the last year following the failure to reach an agreement to continue filling prescriptions for those who are covered by the drug benefit manager Express Script; Walgreen is expected to realize yearly sales losses of $5 billion as a result.
American retailers are facing a beneficial consumer environment on the domestic front with more people back at work and ready to continue with their former shopping habits. U.S. based retailers are likely to outperform European giants who are now facing stifling conditions caused by the Eurozone debt crisis.
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