Tesco Forecast To Grow Faster Than Global Rivals

Despite its recent lacklustre performance in its domestic market, Tesco is still forecast to grow faster than its three main global rivals with a compound annual growth rate (CAGR) of 6.8% between 2011 and 2015, according to new research from IGD.

Although Tesco is set to be the fastest growing of the global top four, Walmart will still be the world’s largest retailer with sales of €386,721m by 2015. This is nearly triple the value of Carrefour’s sales of €133,984m over the same period, while Tesco’s turnover will be €98,292m and Metro’s €81,118m.

Joanne Denney-Finch, Chief Executive, IGD, said: “The key to growth for these global retailers will be presence in the right markets at the right time. The domestic markets remain critical for Carrefour, Metro, Tesco and Walmart, but they are also increasingly relying on emerging markets to sustain strong growth.

“International sales will be driven by a focus on emerging markets, such as China, Latin America, Turkey and Indonesia. The top four global retailers are forecast to achieve double-digit growth in many of these fast developing regions over the next three years.”

Top four global retailers – net turnover in € million and at constant exchange rates 2012 -2015

Retailer	2011	2012	2013	2014	2015	CAGR
Tesco plc	75,538	79,776	85,915	91,776	98,292	6.80%
Metro Group	66,659	68,672	72,610	76,607	81,118	5.03%
Wal-Mart Stores	320,015	335,946	352,049	369,456	386,721	4.85%
Carrefour Group *	113,591	115,574	120,790	127,696	133,984	4.21%

* This figure excludes VAT and the DIA discount chain (€10,254m in 2011) but includes IGD’s estimated sales of Carrefour’s partners and franchise operations. Only 37% of Carrefour stores are company operated with the majority of the convenience and supermarket estates under franchise. Excluding franchise operations, Carrefour reported group consolidated sales excluding VAT of €81,271m in 2011.

Tesco to grow fastest as international leads the way
With annual growth of 6.8% between 2011 and 2015, Tesco is set to achieve the strongest growth of the global grocery top four. Domestic growth will be supported by their renewed focus on quality, service, range and price to improve the customers’ in-store experience.

Tesco’s international markets, particularly China, Turkey and India, will be a key element in driving their long-term growth and returns. The company will try to replicate its successful concepts in the UK, such as Express stores and Clubcard rewards scheme, in other countries.