Study of Retail Industry of United States of America

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  • GDP per capita$46,844 (2010) (10th, nominal; 7th, PPP)
  • GDP dipped in 2008 and 2009 because of Sub-prime crisis in USA
  • Study of Retail Industry of United States of America

    1. 1. ―Study Of Retail Industry of United States of America‖ Presented By: Group 2 Name Of Student Roll No. Abhinav Agarwal 043003 Abhinav Mittal 043004 Deepali Agarwal 043019 Hitaishi Gupta 043026
    2. 2. StatisticsCapital Washington DCGDP $14.59 trillion (2010)GDP growth 3.0% (2010) 312,884,000 (3rd)Population 2011 estimateArea 9,826,675 km2
    3. 3. TOP US CITIES BY POPULATION 4/1/2010US City population estimate Size rank 2010New York, N.Y. 8,175,133 1Los Angeles, Calif. 3,792,621 2Chicago, Ill. 2,695,598 3Houston, Tex. 2,099,451 4Philadelphia, Pa. 1,526,006 5Phoenix, Ariz. 1,445,632 6San Antonio, Tex. 1,327,407 7San Diego, Calif. 1,307,402 8Dallas, Tex. 1,197,816 9San Jose, Calif. 945,942 10 Source: US Census Bureau
    4. 4. US RETAIL STATISTICS Source: In trillion WorldBankYear 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015US GDP 13.30 14.00 14.30 14.04 14.59 14.90 15.21 15.53 15.85 16.19Growth Rate 5.26 2.14 -1.82 3.92 2.10 2.10 2.10 2.10 2.10PFC 9.18 9.80 10.15 9.97 10.36 10.73 10.95 11.18 11.42 11.66% of GDP 69.00 70.00 71.00 71.00 71.00 72.00 72.00 72.00 72.00 72.00Retail Sales 3.40 3.54 3.62 3.41 3.61 3.75 3.89 4.04 4.19 4.35% of PFC 37.08 36.12 35.66 34.26 34.86 34.95 35.53 36.12 36.72 37.34Modern Retail 2.89 3.01 3.08 2.90 3.07 3.19 3.31 3.43 3.56 3.70Traditional Retail 0.51 0.53 0.54 0.51 0.54 0.56 0.58 0.61 0.63 0.65 Source: World Bank (All figures in trillion Dollars)
    5. 5. GDP 2010: 14.59 trillion Private Consumption 2010: Public Spending: 2.9 10.36 trillion (71 % trillion (19.9 %) of GDP) Retail Sales 2010- Non- Retail Sales 3.61 trillion 2010: 6.75 trillion Traditional RetailModern Retail 2010: 2010: 0.54 trillion 3.07 trillion (85 %) (15 %)
    6. 6. US GDP IN COMPARISON WITH THE WORLD GDP by country 2010: Source World Bank (in trillion dollers)14.59 10.169 4.3 4.19 3.04 2.812 2.233With 5 % of the world’s population , USA private consumption is 71 % of GDP.On the other hand, with 20 % of the world’s population China consumes just 37% of their GDP (10.169 trillion)
    7. 7. GDP, PFC & RETAIL SALES OVER YEARS US GDP PFC Retail Sales 3.4 3.54 3.62 3.41 3.61 3.75 9.18 9.8 10.15 9.97 10.36 10.73 13.3 14 14.3 14.04 14.59 14.9 2006 2007 2008 2009 2010 2011Private consumption and retail sales have increased over the years, however it dipped in 2009 dueto recession.
    8. 8. PERSONAL CONSUMPTION- GOODS VS SERVICESPersonal Consumption of goods has been decreasing over the years and that of services isincreasing over the years in US. Hence to satisfy customer needs, retailers will need toincorporate services and experiences into their concepts.
    9. 9. PRIVATE CONSUMPTION GDP 2010: 14.59 trillion Private Consumption 2010: Public Spending: 2.9 10.36 trillion (71 % of trillion (19.9 %) GDP) Retail Sales 2010- Non- Retail Sales 3.61 trillion 2010: 6.75 trillion Traditional Retail Modern Retail 2010: 2010: 0.54 trillion (15 3.07 trillion (85 %) %)Housing forms the major part of consumer expenditure with a share of 34.4 %, followed by Transporatation(16 %), followed by food (12.7%), and then personal insurance and pensions (11.2 %). This shows thatnearly 50 % of the total private expenditure comes from housing and transportation.
    10. 10. The above is like a short story of the recession. Americans are eating out less because they are largelypoorer. However, because of the housing bubble popping, families are paying less on housing. Therecession caused energy prices to crash from 2008 to 2009 but they are back up in 2010. Healthcare costshave moved steadily up. In the end the middle class is still feeling the extreme pinch of this recession.
    11. 11. RETAIL SALESGLOBAL RETAIL SALES US CONTRIBUTION TO TOTAL TREND RETAIL SALES 2009 US 25% Others 75%
    12. 12. The fastestgrowth will take place indeveloping retailmarkets, includi ng the huge markets ofChina and India. Retail issues in developed markets around the globe basically will be a mirror image of issues confronted by the U.S. economy—aging populations, shrinking share of retail spending and increased pending on healthcare. Sources: National statistics offices, OECD and TNS Retail Forward
    13. 13. RETAIL SALES Furniture and Electronics Building mat. GDP 2010: 14.59 home and appliance and garden trillion furnishings stores , 2.78 equip. and stores , 5.23 supplies dealers, 6.47 Food services and drinking places , 13.03 Private Consumption 2010: Public Spending: 2.9 10.36 trillion (71 % of trillion (19.9 %) Non-store GDP) retailers , 8.98 Food and beverage stores , 14.45 Retail Sales 2010- Non- Retail Sales General 3.61 trillion 2010: 6.75 trillion merchandise Health and stores , 11.73 personal care stores , 12.55 Sporting goods, hobby, Miscellaneous book, and Gasoline store retailers music stores stationsModern Retail 2010: Traditional Retail , 5.59 , 16.89 Clothing and , 0.21 2010: 0.54 trillion (15 clothing 3.07 trillion (85 %) %) access. stores , 1.02A major part of the retail sales comes from Sporting goods, hobby and music stores and thereafter Foodand beverages store (14.45% ) and food services and drinking places (13.03 %)
    14. 14. RETAIL SALES CATEGORY WISE 1992-2011Sales of Sporting Goods/Hobbies is Sales of Electronic Appliances has been fluctuating over decreasing over the years. the years . It has decreased in the past 2 decades. Americans are probably not building new houses, hence the furniture sales are decreasing over the years.
    15. 15. RETAIL SALES CATEGORY WISE 1992-2011 RETAIL CATEGORY WISE 1992-2011 Americans are spending more on food since 2008, becauseAmericans are spending less on Clothing over the years as a spending on basic necessities increased, when otherpercentage of the total retail sales. spending was cut due to subprime crisis.
    16. 16. US Retail Sales 2009: Clothing storesJewelry, lug Other Mens gage, and clothing clothing leather stores storesgoods stores 8% 6% 14% Womens Shoe stores clothing 12% stores 26% Clothing Family stores clothing 74% stores 60%
    17. 17. US Retail Sales 2010: Food and Beverage Stores Food and Beverage Stores 2009 Grocery Stores 2009Specialty food Beer, wine, and Convienienc stores liquor stores e Stores 3% 7% 5% Supermarket s and other grocery Grocery stores stores 90% 95% Source: us census.org
    18. 18. Grocery Market Share by Format Fresh, Organic/Natural, 1.20 Millitary, 0.50% Other small % grocery, 1.10% Doller, 2.10% Super Warehouse, 1.70% Limited Assortment, 3.20% Drug, 4.50% Superstore, 17.30% Mass, 5.40% Fod/Drug Wholesale Club, 7.30% Combination, 11.50% Convenience without gas, 2.10% Convenience with gas, 13.30% Conventional Supermarket, 8.30% Supercenter, 20.70%Source: Food Retailing in 21st Century, www.fmi.org
    19. 19. US Retail Sales 2010: Electronics and Appliances Stores Household Computer and appliance stores software stores 16% 20% Radio, TV, and other elect. stores 64% Source: us census.org
    20. 20. Modern vs Traditional Retail Traditional, 15 % Modern, 85%Indian unorganized retail is currently 93 % of the total sector and is expected to grow, where as USunorganized retail is expected to stay constant at 15 %.
    21. 21. Top 10 Global Retailers Name Country of Origin Country of 2009 Revenue($ 2009 Profit Margin Operation billion) Target US 1 $65.35 3.8% The Home Depot US 5 $66.17 4.0% Aldi Einkauf GmbH Germany 18 $67.7 n/a & Co. Costco Wholesale US 9 $71.42 1.5% Corp. The Kroger Co. US ! $76.7 0.1% Schwarz Germany 25 $77.22 n/a Unternehmens Treuhand KG Tesco UK 13 $90.43 4.1% Metro AG Germany 33 $91 0.8% Carrefour France 36 $122 0.5% Walmart US 16 $404 3.6%Out of the top ten global retailers, 5 retailers are from USA with total revenue of $682 billion in 2009. Thisshows the strength of the US retailers across the world.
    22. 22. Share of Top 250 Retailers By region/Country 2009 Share of Top 250 sales By region/Country 2009 Latin Other Latin America, 4% Europe, 11.90 America, 1.6 % % US, 42.10% US, 33.60% U.K, 6.90% Other Europe, 18% U.K, 6% Germany, 11. 60% Germany, 7.6 0% France, 5.20% Canada, 4% France, 9.90% Other Africa/Middle Other Canada, 2.40 Asia/Pacific, 5. East, 3.20% Asia/Pacific, 4. % Japan, 12.80 Africa/Middle 60% % 70% Japan, 7.90% East, 1%US retailers occupy a market share of 33.6% out of the total top 250 retailers in the world that means1 out of every 3 top 250 retailers is from United States.US retailers Sell 42.1 % of the total sales of the top 250 retailers across the globe which accounts for2/5th of the total sales.For these 84 US retailers in the Top 250 retailers list, 13.3% of their business comes fromforeign operations and rest 86.7 % of their business comes from US itself. Source: Deloitte Global Retail Study 2011
    23. 23. TOP 250 RETAILERS- FMCGFast MovingConsumerGoods Percentage of US Retailers Sales in Top 250 FMCG retailers Retail Sales($ Country ofRank Company billions) Origin1 Walmart 405 US Germany 19% US2 Carrfore 119 France 62% UK3 Tesco 90 UK 8%4 Schwarz 77 Germany France 11%5 Kroger 76 US6 Costco 69 US7 Aldi 67 Germany8 Walgreens 63 US9 Rewe 61 Germany United States Constitute 62 % of the total retail sales in FMCG category amongst Top 250 retailers10 CVS Caremark 55 US Source: Deloitte Global Retail Study 2011
    24. 24. TOP 250 RETAILERS BY PRODUCT TYPE TOP 250 RETAILERS- FASHION Percentage of US Retailers Sales in Top 250 FashionFashion Goods retailers Germany 6% Retail Sales($ Country ofRank Company billions) Origin Sweden 8%1 Macys 23 US Japan2 TJX 20 US 9% US 59%3 J.C Penny 17.5 US France 9%4 Kohls 17.1 US5 Inditech 15 Spain Spain 9%6 Gap 14 US7 LVMH 13.7 France Isetan8 Mitsukoshi 13.5 Japan9 H&M 13.2 Sweden United States Constitute 59 % of the total retail sales in Fashion category10 C&A Europe 8.8 Germany in Top 250 retailers Source: Deloitte Global Retail Study 2011
    25. 25. TOP 250 RETAILERS BY PRODUCT TYPE TOP 250 RETAILERS – HARDLINERS & LEISURE GOODS Percentage of US Retailers Sales in Top 250Hardlines & leisure goods Retailers Hardliners & Leisure Goods retailers Retail Sales($ Country of UKRank Company billions) Origin 5% France1 Home Depot 66 US 11% US2 Best Buy 49.6 US Japan 67% 7%3 Lowes 47.2 US Sweden4 IKEA 29.1 Sweden 10%5 Amazon.com 23.8 US Yamada6 Denki 21.7 Japan7 PPR 18.7 France8 Kingfisher 15.3 UK9 Staples 14.6 US United States Constitute 67 % of the total retail sales in Hardlines &10 Groupe adeo 13.8 France Leisure Goods category in Top 250 retailers Source: Deloitte Global Retail Study 2011
    26. 26. TOP 20 RETAILERS IN USA 2010 US Retail Sales($ Number of MarketRank Company Headquaters billion) stores(2010) World wide retail Sales (in $000) share 1 Wal-Mart Bentonville, Ark. $307 4358 421 11.69 2 Kroger Cincinnati $78 3609 78 2.17 3 Target Minneapolis $65 1750 65 1.81 4 Walgreen Deerfield, Ill. $61 7456 63 1.75 The Home 5 Depot Atlanta $60 1966 68 1.89 6 Costco Issaquah, Wash $58 412 78 2.17 7 CVS Caremark Woonsocket, R.I $57 7217 57 1.58 8 Lowes Mooresville, N.C. $48 1723 48 1.33 9 Best Buy Richfield, Minn. $37 1312 50 1.39 10 Sears Holdings Hoffman Estates, Ill. $35 3484 41 1.14 11 Safeway Pleasanton, Calif. $33 1475 38 1.06 12 SUPERVALU Eden Prairie, Minn. $31 2436 31 0.86 13 Rite Aid Camp Hill, Pa. $25 4750 25 0.69 14 Publix Lakeland, Fla. $25 1173 25 0.69 15 Macys Cincinnati $24 852 25 0.69 16 Ahoid USA Washington, D.C. $23 751 56 1.56 17 McDonalds Oak Brook, Ill. $23 14027 69 1.92 Delhaize 18 America Salisbury, N.C 19 1627 27 0.75 19 Amazon.com Seattle, Wash. 18.5 na 32 0.89 Menomonee Falls, 20 Kohls Wis. 18.4 1083 18 0.50 Source-http://www.stores.org/2011/Top-100-Retailers
    27. 27. TOP 20 RETAILERS IN US- MARKET SHARE Wal-Mart, 11.69 Kroger, 2.17 Target, 1.81 Walgreen, 1.75 The Home Depot, 1.89 Costco, 2.17 CVS Caremark, 1.58 Lowes, 1.33 Best Buy, 1.39 Sears Holdings, 1.14 Ahoid USA, 1.56 Others, 69.61 McDonalds, 1.92Walmart despite having a turnover almost equal to the Indian retail Industry has a market share of only 11.7% in USA, and McDonald’s has just 2 % of market share. Source-http://www.stores.org/2011/Top-100-Retailers
    28. 28. FDI IN USA FDI IN RETAILFDI in retail has been fluctuating over the years, in the recent years from 2005 to 2008 , it increased at afast pace but declined thereafter due to sub prime crisis in 2009.
    29. 29. EMPLOYMENT BY U.S. AFFILIATES OF FOREIGN FIRMS BYINDUSTRY, 2008 In 2008, foreign firms employed 489,000 employees in US retail sector.
    30. 30. LAWS AFFECTING RETAIL IN USA Restrictions such as the ‗yarn forward‘ rule have severely undermined benefits that could otherwise be reaped from recent free trade agreements and should not be repeated now that a major new agreement is under negotiation. These restrictions make it difficult for retailers to use these agreements and thereby provide American families with the products they need at prices they can afford. Removing these restrictions would help promote new trade and investment, thereby creating U.S. jobs and export opportunities while holding down prices for American consumers. Not to Let Railroad Unions Strike- Retailers rely heavily on freight rail to move merchandise across the country, especially during the holiday season, and that even a one-day strike at such a crucial time would create a sustained backlog that could clog the transportation system for weeks. Other modes of transportation would be unable to take over the extra volume, and the effects could potentially linger into the spring selling season. Credit Card Swipe Fee Reform - American businesses pay the highest swipe fees in the world, impacting the price of everything they buy. Debit card reform cutting the fees roughly in half took affect October 1, and people are now beginning to ask Congress to take the next step and address credit card swipe fees. While debit swipe totalled about $20 billion a year before reform, credit card swipe amounts to $30 billion a year and presents the opportunity for even larger savings for retailers and their customers.
    31. 31. LAWS AFFECTING RETAIL IN USA LAWS AFFECTING RETAIL IN USA VAT - A federal tax on consumption will dampen consumer spending. Retailers will reduce operations, closing stores and reducing employment. Some retailers will go out of business, especially smaller retailers whose margins are slimmer so they will be forced to pass the entire burden of the tax onto their customers. Backdoor Card Check –National Retail Foundation (NRF) wants U.S. House of Representatives to approve pending legislation that would block controversial moves by the National Labour Relations Board (NLRB) to allow “ambush” union organizing elections and the formation of micro-unions, saying that bill is needed to restore fairness and balance in labour negotiations. NRF believes that when a union proposes organizing a workplace, employers should be given a fair opportunity to present their side of the case – an opportunity that is taken away by “ambush” elections and other restrictions proposed by the NLRB. Creation of micro-bargaining units would make it difficult if not impossible to move workers from department to department within a store or to cross train workers for multiple tasks. And while the “card check” provision of Employee Free Choice Act (EFCA) has yet to be attempted through the NLRB, NRF is particularly concerned that eliminating secret ballot union elections in favour of the card check process would subject workers to intimidation and coercion, further stacking the deck in favour of unions. With only about 5 percent average unionization, the retail industry is considered “low hanging fruit” by organized labour and is a top priority for unionization efforts.
    32. 32. US RETAIL FUTURE Formats with Above Average Sales Growth Outlook 2001-2006 2006-2012 Non auto retail sales growth forecast 33.20% 27.70% 15.70% 12.30% 10.20% 9.20% 5.90%6.50% 6.40% 5.50% 5.80%5.40% 5.20% 5.20% 5.20% 5.20% 5.20% 5.20% E-Commerce Supercentres CE Appliances Warehouse Clubs Convenience Drug Stores stores Stores Source: PWC US retail Consumer reportE-Commerce and Supercentres will be growing at an above average growth rate of more than 10 %.Convenience stores would also be growing at a growth rate of more than 5%. US online Retail would be11% of the total retail and 15% of total retail(excluding grocery) by 2015 . (Source: Forester)
    33. 33. US ONLINE RETAIL FUTUREOnline retail format will constitute 11% of the total retail and 15 % of the total retail(excluding grocery) by2015. This shows that the future of US retail lies in online retail. Americans would prefer to purchase onlinein future.
    34. 34. Thank YouName Of Student Roll No.Abhinav Agarwal 043003Abhinav Mittal 043004Deepali Agarwal 043019Hitaishi Gupta 043026

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