09 Jun 2021
Posted in Business Fundamentals
Sustainable business initiatives helped majority of the top 25 retailers by revenue thrive in pandemic-hit year, says GlobalData
- Among the top 25 retailers by revenue, close to one-third reported double-digit year-on-year (YoY) growth in revenue
- Approximately 70% recorded growth in their YoY net earnings
Fiscal 2020 was arguably the most difficult year in recent history due to the COVID-19 pandemic, however, with the timely adoption of strategic and operational changes, retailers worldwide were able to adapt to the pandemic-driven change in consumer behavior. This has also been evident from the performance of the top 25 publicly traded global retailers by revenue, with more than 50% of the companies in the list reporting over 5% year-on-year (YoY) revenue growth, reveals GlobalData, a leading data and analytics company.
The data and analytics firm analyzed the YoY change and compound annual growth rate (CAGR) of the top 25 publicly traded retailers in terms of revenue, operating profit and net profit over the past five years.
Keshav Kumar Jha, Business Fundamentals Analyst at GlobalData, comments: “Lockdown measures, and other restrictions imposed to curb the spread of COVID-19, led to an increase in demand for contactless delivery services and provided e-retailers an edge over traditional brick-and-mortar store operators.
“The major e-commerce firms, including Amazon, Alibaba, and JD.com reported a significant increase in the number of active customers annually on their retail marketplaces, which enabled them to register growth, with each company reporting over 25% YoY revenue growth.”
Apart from e-commerce players, Lowe’s was the only company that clocked over 20% YoY revenue growth. The company reported a 14% increase in comparable transactions and 12% increase in comparable average ticket, which led to an increase in its revenue.
Seven & I was the only retailer reporting double-digit decline in its YoY revenue. The company reported a decrease in its sales in various segments, including superstore, department store and specialty store operations, as well as its financial services sector.
Jha continues: “Amazon, JD.com and Carrefour reported over 40% growth in operating profit. Impressive growth in revenue was offset by the impact of the increase in operating expenses on the profitability of Amazon and JD.com, while Carrefour’s cost-containment measures resulted in a 4% decline in its operating expenses.”
Walgreens Boots Alliance (Walgreens) and AEON were the two major players with over 50% YoY decline in operating profit and net profit. Reimbursement pressure on the US Pharmacy unit and the adverse effects of COVID-19 led to a decline in Walgreens’ profitability.
Containment measures such as temporary suspension and shortened business hours at shopping malls, specialty stores and financial services businesses affected AEON’s profitability considerably.
Over 50% of companies in the top 25 global retailers by revenue reported double-digit YoY growth in their net income, with seven retailers recording 50% or more growth. Higher revenues, improved operational performance and increases in other income – alongside reduction in expenses – led to an increase in the net earnings of Amazon, Kroger, JD.com and Albertsons. The cost-optimization initiatives of Tesco and George Weston helped improve their net earnings.