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

“Study Of Retail Industry of United States of America”

Statistics

Capital Washington DC

GDP $14.59 trillion (2010)

GDP growth 3.0% (2010)

Population 312,884,000 (3rd) 2011 estimate

Area 9,826,675 km2

US City4/1/2010

populationestimate Size rank

2010New York, N.Y. 8,175,133 1

Los Angeles, Calif. 3,792,621 2

Chicago, Ill. 2,695,598 3

Houston, Tex. 2,099,451 4

Philadelphia, Pa. 1,526,006 5

Phoenix, Ariz. 1,445,632 6

San Antonio, Tex. 1,327,407 7

San Diego, Calif. 1,307,402 8

Dallas, Tex. 1,197,816 9

San Jose, Calif. 945,942 10

TOP US CITIES BY POPULATION

Source: US Census Bureau

US RETAIL STATISTICS

Source: World Bank (All figures in trillion Dollars)

In trillion

Source: WorldBank

Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

US GDP 13.30 14.00 14.30 14.04 14.59 14.90 15.21 15.53 15.85 16.19

Growth Rate 5.26 2.14 -1.82 3.92 2.10 2.10 2.10 2.10 2.10

PFC 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 72.00

Retail 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 37.34

Modern Retail 2.89 3.01 3.08 2.90 3.07 3.19 3.31 3.43 3.56 3.70

Traditional Retail 0.51 0.53 0.54 0.51 0.54 0.56 0.58 0.61 0.63 0.65

GDP 2010: 14.59 trillion

Private Consumption

2010: 10.36 trillion (71

% of GDP)

Retail Sales 2010-3.61 trillion

Modern Retail 2010: 3.07 trillion

(85 %)

Traditional Retail 2010: 0.54 trillion

(15 %)

Non- Retail Sales 2010: 6.75 trillion

Public Spending: 2.9 trillion (19.9

%)

US GDP IN COMPARISON WITH THE WORLD

US

China

Japa

nIn

dia

Germ

any

Russia UK

14.59

10.169

4.3 4.193.04 2.812 2.233

GDP by country 2010: Source World Bank(in trillion dollers)

With 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)

Private consumption and retail sales have increased over the years, however it dipped in 2009 due to recession.

2006 2007 2008 2009 2010 2011

13.3 14 14.3 14.04 14.59 14.9

9.18 9.8 10.15 9.97 10.36 10.733.4 3.54 3.62 3.41 3.61 3.75

US GDP PFC Retail Sales

GDP, PFC & RETAIL SALES OVER YEARS

Personal Consumption of goods has been decreasing over the years and that of services is increasing over the years in US. Hence to satisfy customer needs, retailers will need to incorporate services and experiences into their concepts.

PERSONAL CONSUMPTION- GOODS VS SERVICES

GDP 2010: 14.59 trillion

Private Consumption

2010: 10.36 trillion (71

% of GDP)

Retail Sales 2010-3.61 trillion

Modern Retail 2010: 3.07 trillion

(85 %)

Traditional Retail 2010: 0.54 trillion

(15 %)

Non- Retail Sales 2010: 6.75 trillion

Public Spending: 2.9 trillion (19.9

%)

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 that nearly 50 % of the total private expenditure comes from housing and transportation.

PRIVATE CONSUMPTION

The above is like a short story of the recession.  Americans are eating out less because they are largely poorer.  However, because of the housing bubble popping, families are paying less on housing.  The recession caused energy prices to crash from 2008 to 2009 but they are back up in 2010.  Healthcare costs have moved steadily up.  In the end the middle class is still feeling the extreme pinch of this recession.

GLOBAL RETAIL SALES TREND

US CONTRIBUTION TO TOTAL RETAIL SALES 2009

US25%

Others75%

RETAIL SALES

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.

The fastest growth will

take place in developing

retail markets,

including the huge markets of China and

India.

Sources: National statistics offices, OECD and TNS Retail Forward

A major part of the retail sales comes from Sporting goods, hobby and music stores and thereafter Food and beverages store (14.45% ) and food services and drinking places (13.03 %)

Furniture and home furnishings stores ; 5.23

Electronics and appli-

ance stores ; 2.78

Building mat. and garden equip. and supplies

dealers; 6.47

Food and beverage

stores ; 14.45

Health and personal care stores ; 12.55

Gasoline sta-tions ; 0.21

Clothing and clothing ac-

cess. stores ; 1.02

Sporting goods, hobby, book, and music stores

; 16.89

General mer-chandise

stores ; 11.73

Miscella-neous store retailers ;

5.59

Non-store re-tailers ; 8.98

Food services and drinking

places ; 13.03

GDP 2010: 14.59 trillion

Private Consumption

2010: 10.36 trillion (71

% of GDP)

Retail Sales 2010-3.61 trillion

Modern Retail 2010: 3.07 trillion

(85 %)

Traditional Retail 2010: 0.54 trillion

(15 %)

Non- Retail Sales 2010: 6.75 trillion

Public Spending: 2.9 trillion (19.9

%)

RETAIL SALES

Sales of Sporting Goods/Hobbies is decreasing over the years.

Sales of Electronic Appliances has been fluctuating over 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.

RETAIL SALES CATEGORY WISE 1992-2011

RETAIL SALES CATEGORY WISE 1992-2011

Americans are spending less on Clothing over the years as a percentage of the total retail sales.

Americans are spending more on food since 2008, because spending on basic necessities increased, when other spending was cut due to subprime crisis.

RETAIL SALES CATEGORY WISE 1992-2011

US Retail Sales 2009: Clothing stores

Clothing stores 74%

Shoe stores 12%

Jewelry, luggage,

and leather goods stores13%

Men's clothing stores

6%

Women's clothing stores 26%

Family cloth-ing stores

60%

Other clothing stores

8%

US Retail Sales 2010: Food and Beverage Stores

Grocery stores 89%

Specialty food stores 3%

Beer, wine, and liquor stores

7%

Food and Beverage Stores 2009

Convienience Stores5%

Supermarkets and other grocery

stores95%

Grocery Stores 2009

Source: us census.org

Superstore; 17.30%

Fod/Drug Combination; 11.50%

Conventional Supermarket; 8.30%

Supercenter; 20.70%

Convenience with gas; 13.30%

Convenience without gas; 2.10%

Wholesale Club; 7.30%

Mass; 5.40%

Drug; 4.50%

Limited Assortment; 3.20%Super Warehouse; 1.70%Doller; 2.10%Fresh, Organic/Natural; 1.20%Millitary; 0.50%Other small grocery; 1.10%

Grocery Market Share by Format

Source: Food Retailing in 21st Century, www.fmi.org

US Retail Sales 2010: Electronics and Appliances Stores

Source: us census.org

Household ap-pliance stores

16%

Radio, TV, and other elect.

stores 64%

Computer and software stores

21%

Indian unorganized retail is currently 93 % of the total sector and is expected to grow, where as US unorganized retail is expected to stay constant at 15 %.

Modern; 85%

Traditional; 15%

Modern vs Traditional Retail

Name Country of Origin

Country of Operation

2009 Revenue($ billion)

2009 Profit Margin

Target US 1 $65.35 3.8%

The Home Depot US 5 $66.17 4.0%

Aldi Einkauf GmbH & Co.

Germany 18 $67.7 n/a

Costco Wholesale Corp.

US 9 $71.42 1.5%

The Kroger Co. US ! $76.7 0.1%

Schwarz Unternehmens Treuhand KG

Germany 25 $77.22 n/a

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. This shows the strength of the US retailers across the world.

Top 10 Global Retailers

US; 34%

Canada; 4%Africa/Middle

East; 3%Japan; 13%

Other Asia/Pacific; 6%

France; 5%

Germany; 8%

U.K; 6%

Other Europe; 18%

Latin America; 4%

Share of Top 250 Retailers By region/Country 2009

Source: Deloitte Global Retail Study 2011

US; 42.10%

Canada; 2.40%Africa/Middle East; 1.00%

Japan; 7.90%Other Asia/Pacific; 4.70%

France; 9.90%

Germany; 11.60%

U.K; 6.90%

Other Europe; 11.90%

Latin America; 1.60%

Share of Top 250 sales By region/Country 2009

US retailers occupy a market share of 33.6% out of the total top 250 retailers in the world that means 1 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 for 2/5th of the total sales.

For these 84 US retailers in the Top 250 retailers list, 13.3% of their business comes from foreign operations and rest 86.7 % of their business comes from US itself.

TOP 250 RETAILERS- FMCG

Source: Deloitte Global Retail Study 2011

Fast Moving Consumer Goods

Rank Company

Retail Sales($ billions)

Country of Origin

1 Walmart 405 US

2 Carrfore 119 France

3 Tesco 90 UK

4 Schwarz 77 Germany

5 Kroger 76 US

6 Costco 69 US

7 Aldi 67 Germany

8 Walgreens 63 US

9 Rewe 61 Germany

10CVS Caremark 55 US

US62%

France11%

UK8%

Germany19%

Percentage of US Retailers Sales in Top 250 FMCG retailers

United States Constitute 62 % of the total retail sales in FMCG category amongst Top 250 retailers

TOP 250 RETAILERS BY PRODUCT TYPE

Source: Deloitte Global Retail Study 2011

Fashion Goods

Rank Company

Retail Sales($ billions)

Country of Origin

1 Macy's 23 US

2 TJX 20 US

3 J.C Penny 17.5 US

4 Kohl's 17.1 US

5 Inditech 15 Spain

6 Gap 14 US

7 LVMH 13.7 France

8Isetan Mitsukoshi 13.5 Japan

9 H&M 13.2 Sweden

10 C&A Europe 8.8 Germany

United States Constitute 59 % of the total retail sales in Fashion category in Top 250 retailers

US59%

Spain10%

France9%

Japan9%

Sweden8%

Germany6%

Percentage of US Retailers Sales in Top 250 Fashion retailers

TOP 250 RETAILERS- FASHION

TOP 250 RETAILERS BY PRODUCT TYPE

Source: Deloitte Global Retail Study 2011

Hardlines & leisure goods Retailers

Rank Company

Retail Sales($ billions)

Country of Origin

1 Home Depot 66 US

2 Best Buy 49.6 US

3 Lowe's 47.2 US

4 IKEA 29.1 Sweden

5 Amazon.com 23.8 US

6Yamada Denki 21.7 Japan

7 PPR 18.7 France

8 Kingfisher 15.3 UK

9 Staples 14.6 US

10 Groupe adeo 13.8 France

United States Constitute 67 % of the total retail sales in Hardlines & Leisure Goods category in Top 250 retailers

US67%

Sweden10%

Japan7%

France11%

UK5%

Percentage of US Retailers Sales in Top 250 Hard-liners & Leisure Goods retailers

TOP 250 RETAILERS – HARDLINERS & LEISURE GOODS

Source-http://www.stores.org/2011/Top-100-Retailers

TOP 20 RETAILERS IN USA

Rank Company Headquaters2010 US Retail Sales($ billion)

Number of stores(2010)

World wide retail Sales (in $000)

Market 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

5The Home

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 Lowe's Mooresville, N.C. $48 1723 48 1.33

9 Best Buy Richfield, Minn. $37 1312 50 1.39

10Sears

HoldingsHoffman Estates,

Ill. $35 3484 41 1.14

11 Safeway Pleasanton, Calif. $33 1475 38 1.06

12 SUPERVALUEden 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 Macy's Cincinnati $24 852 25 0.69

16 Ahoid USA Washington, D.C. $23 751 56 1.56

17 McDonald's Oak Brook, Ill. $23 14027 69 1.92

18Delhaize America Salisbury, N.C 19 1627 27 0.75

19 Amazon.com Seattle, Wash. 18.5 na 32 0.89

20 Kohl'sMenomonee Falls,

Wis. 18.4 1083 18 0.50

Source-http://www.stores.org/2011/Top-100-Retailers

Walmart 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.

TOP 20 RETAILERS IN US- MARKET SHARE

Wal-Mart; 11.69 Kroger; 2.17

Target; 1.81

Walgreen; 1.75The Home Depot;

1.89Costco; 2.17CVS Caremark;

1.58

Lowe's; 1.33Best Buy; 1.39Sears Holdings;

1.14Ahoid USA; 1.56

McDonald's; 1.92Others; 69.61

FDI IN USA FDI IN RETAIL

FDI in retail has been fluctuating over the years, in the recent years from 2005 to 2008 , it increased at a fast pace but declined thereafter due to sub prime crisis in 2009.

EMPLOYMENT BY U.S. AFFILIATES OF FOREIGN FIRMS BY INDUSTRY, 2008

In 2008, foreign firms employed 489,000 employees in US retail sector.

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.

LAWS AFFECTING RETAIL IN USALAWS 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.

E-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 be 11% of the total retail and 15% of total retail(excluding grocery) by 2015 . (Source: Forester)

US RETAIL FUTURE

E-Commerce Supercentres CE Appliances stores

Warehouse Clubs

Convenience Stores

Drug Stores

33.20%

15.70%

5.90%

9.20%

12.30%

5.80%

27.70%

10.20%

6.50% 6.40% 5.50% 5.40%5.20% 5.20% 5.20% 5.20% 5.20% 5.20%

Formats with Above Average Sales Growth Outlook

2001-2006 2006-2012Non auto retail sales growth forecast

Source: PWC US retail Consumer report

US ONLINE RETAIL FUTURE

Online retail format will constitute 11% of the total retail and 15 % of the total retail(excluding grocery) by 2015. This shows that the future of US retail lies in online retail. Americans would prefer to purchase online in future.

Thank YouName Of Student Roll No.

Abhinav Agarwal 043003

Abhinav Mittal 043004

Deepali Agarwal 043019

Hitaishi Gupta 043026