It's that time of year again when we get a snapshot of the retail landscape, and the National Retail Federation's annual Top 100 Retailers list offers a fascinating glimpse into who's leading the pack. This year's report, compiled by Kantar, highlights a subtle but significant shift: the feverish, pandemic-fueled spending spree is starting to cool down.
David Marcotte, senior vice president of global retail and technology for Kantar, points out that the "big trend" is this easing of pandemic-era spending. But don't expect a revolution at the very top. The top 20 retailers, much like last year, show remarkable stability. These giants, with their immense resources and deep pockets, can weather minor storms with relative ease. The only notable shuffle in the top tier was CVS and Target swapping spots at numbers 6 and 7. For these behemoths, even a couple of billion dollars in losses can be considered "minimal" given their sheer scale.
Walmart, as usual, remains the undisputed leader, boasting over $533 billion in U.S. sales. Even the 20th retailer on the list, 7-Eleven, pulled in an impressive $27.88 billion. It's a testament to their established infrastructure and customer loyalty.
When we look beyond the absolute top, growth stories emerge. Discount grocer Aldi, which also owns Trader Joe's, made a significant leap, showing the second-highest percentage of U.S. sales growth at 17%. But the real standout in terms of percentage growth was Overstock.com, which saw a staggering 135.1% increase. This surge, however, was largely driven by a strategic acquisition – the rights to Bed Bath & Beyond's online operations. Marcotte notes that while this boosted their numbers, the long-term success of such acquisitions is still being evaluated.
Mergers and acquisitions (M&A) continue to be a key strategy for retailers looking to expand their reach and volume. We saw Dick's Sporting Goods climb two spots, reflecting solid sales growth. Interestingly, Walmart managed to increase its sales even while shedding some brands like Moosejaw and Eloquii. The rationale behind this M&A trend is clear: many companies have the capital or access to it, and they recognize the need for greater volume to negotiate better terms with vendors, coupled with the opportunity to acquire growing businesses.
This trend is particularly evident among smaller players, especially in the grocery sector. Raley's Supermarkets, for instance, acquired Bashas' and maintained its position at No. 77. Similarly, Tops and Price Chopper/Market combined to create Northeast Grocery, which sits at No. 58, aiming for greater scale and efficiency.
The grocery sector itself is a compelling story within the Top 100. While the massive Kroger and Albertsons merger remains entangled in legal proceedings, impacting their investment strategies and leading them to shed stores for regulatory approval, other grocers are actively expanding. Royal Ahold Delhaize USA, operating brands like Giant and Food Lion, is keeping pace. Publix Supermarkets saw robust sales growth, and H.E. Butt Grocery also reported strong gains. Marcotte describes this growth as "slow but exciting."
It's noteworthy that six of the top 20 spots are held by grocers, and this doesn't even account for retailers like Walmart, Costco, and Target, where food is a significant part of their offerings. While food costs did rise in 2023, Marcotte doesn't attribute the grocery sector's strong showing solely to inflation. Instead, he points to the disappearance of pandemic-era inventory shortages and a greater availability of goods. This suggests a return to more normalized shopping patterns, with consumers having more choices and retailers restocking their shelves.
