Extended Retail Solutions Article: Top 5 Retailers

It may be no surprise to see Wal-Mart topping the list of turnovers but ERS discovers the rest of the top money-spinners in the retail world and the information leaders behind them.

The highly competitive retail companies have become evermore reliant on technology to stay in the top five lists and the CIO is a position of the modern era that will grow in importance as IT progresses. The manipulation of technology and the abundance of information have seen new developments push the turnovers higher and higher spreading companies across the world in search of new markets.

The biggest retailers dominate the market and their reinvestment into IT sees they maintain their stronghold. The companies below them have to be especially innovative in their application of technology and use of information to bring the gap closer. There is a stark contrast between top and second spot as the gargantuan Wal-Mart turns over an equivalent to more than three and a half of its closest rival’s revenue. The gulf is so large it makes the placing of lesser retailers appear so juxtaposed as to be a measure between wholly different industries.

This year has seen the shifting of organisations around the edges of the top five lists as, despite the iron grip of the number ones, the companies behind them have a much more fraught competition in hand.

Wal-Mart is the biggest retailer in the world with an annual turnover that exceeds the gross national product of 75 percent of the world’s countries. A colossus of an organisation, Wal-Mart dwarfs all competition due to its multifaceted approach to retailing.

Criticism has also been raised due to the scale of the company and its domination of the market, making local and smaller businesses obsolete for many consumers. It continues to grow and the Walton family that started the biggest company in retail is collectively worth over $100 billion dollars, far exceeding Bill Gates’ bank balance and with 1.6 million employees it is the largest private employer in America.

The Wal-Mart Stores segment includes Discount Stores, Supercenters, and Neighborhood Markets in the United States, as well as Walmart.com. Wal-Mart currently operate 1,276 Wal-Mart stores, 1,838 Supercenters, 92 Neighborhood Markets, and 556 SAM’s Clubs (wholesale outlets) in 50 states in the United States. The company also own various retail formats in Argentina, Brazil, Canada, Germany, Mexico, Puerto Rico, South Korea, and the United Kingdom.

The Home Depot, Inc. is the biggest home improvement retailer in the world, operating out of the United States, Canada, and Mexico. The company provides its products and services through home depot and EXPO design center stores. Its Home Depot stores sell a range of building materials, home improvement products and lawn and garden products, as well as providing various installation services. The EXPO design center stores offer various interior design products and installation services for kitchens, baths, appliances, and flooring as well as products for lighting, decorating and storage and organization projects. These stores also provide project management and installation services.

As of July 31, 2005, the company operated 1,955 stores. In addition, the company distributes plumbing, heating, ventilation, and air conditioning appliances and other related products primarily to trade and mechanical contractors. The Home Depot Inc. was founded in 1978 and is based in Atlanta, Georgia.

Kroger is the nation's largest supermarket chain with 2,532 grocery stores in 32 states. It is also the third largest retailer in the US and the fifth largest in the world. Barney Kroger opened his first food store in 1883. He bought out his partner the following year and opened a second store. In 1999, Kroger merged with Fred Meyer in a $13 billion deal that formed the nation's largest food retailer. Kroger states that it holds at least the primary or secondary position in 40 of its 52 major markets. A major market for Kroger is one with 9 or more Kroger stores.

Kroger also operates 795 convenience stores in 16 states. Plus, it runs 436 fine jewellery stores under names like Fred Meyer Jewellers, Littman Jewellers, Barclay Jewellers, and Fox's Jewellers.

Target Corporation operates general merchandise discount stores in the United States. The company’s stores offer men and women’s clothing, home furnishings, electronic products, sports products, toys, and entertainment products. Target Corporation also sells its merchandise online.

In addition, it offers credit cards to its customers and as of April 21, 2005, the company operated 1,330 stores in 47 states. Target Corporation was incorporated in 1902 and is headquartered in Minneapolis, Minnesota.

Costco operates an international chain of membership warehouses, primarily under the ‘Costco Wholesale’ name. The warehouses are designed to help individuals and small-to-medium sized businesses reduce costs in purchasing for resale and for everyday business use. Customers pay an annual membership fee of $45 to shop at the stores.

Costco has 452 warehouses with 334 locations in 37 U.S. States & Puerto Rico, 64 locations in nine Canadian provinces, 15 locations in the United Kingdom, 4 locations in Taiwan, 5 locations in Korea, 5 locations in Japan and 25 locations in 18 Mexican states.

Costco was founded in 1982 by Jeff Brotman and James Sinegal. They opened the first Costco Wholesale Club in Seattle in 1983. The company merged with rival wholesale club Price Company in 1993 and changed its name from PriceCostco to Costco in 1997.

Best Buy Co. Inc. operates retail stores and commercial Web sites under the brand names Best Buy, Future Shop, Magnolia Audio Video, and Geek Squad, as well as an outlet store on eBay. It also provides in-store and home services including computer set-up, repair, and software installation as well as the installation of mobile electronics, home networking, delivery and installation of appliances and home theater systems.

As of October 25, 2005, Best Buy Co. operated approximately 840 retail stores in the United States and Canada. The company was founded by Richard M. Schulze. It was incorporated in 1966 as Sound of Music, Inc. and changed its name to Best Buy Co., Inc. in 1983.

Dillman is perhaps the most powerful CIO in the world, leading the business-technology efforts of the most successful and widely recognized retailer on the planet. Now 48, she became executive Vice President and CIO of Wal-Mart Stores Inc. in 2004, although she had been at the helm of the Information Systems Division as senior VP since August 2002.

She is now at the forefront of technology not just for Wal-Mart but also for the whole U.S. retail industry. A top priority is to spread radio-frequency identification tags, or RFID, throughout Wal-Mart's supply chain. This will allow the company to use the Web to track inventory from factories in China to store shelves everywhere.

Robert P. Derodes, 54, joined Home Depot in 2002 with the aim to ‘Digitize the Depot’ and has been Executive Vice President and Chief Information Officer since February 2002. He previously served as President and Chief Executive Officer of Delta Technology Inc. and Chief Information Officer for Delta Air Lines, Inc. from September 1999 until February 2002. Earlier carer highlights include time at Citibank for the Card Products Group and Sabre Development Services for the Sabre Group Holdings, Inc., a subsidiary of American Airlines.

A native of Wooster, Ohio, Derodes received a BSc degree in Business Administration from St. Louis University, and his MBA from the University of Texas. In his time at Home Depot he has been lauded by his peers as the man behind innovations that have improved productivity, customer satisfaction, business practices and shareholder value.

Amidst recent outsourcing queries Burdick believes that his “own employees do it better” adding that Costco typically promotes from within when higher-level IT jobs open up so as to retain the business knowledge that workers have accumulated.

Since joining Costco, Burdick has developed a ‘hybrid model’ partnership with US Technology Resources LLC. "We're actually able to give people good career paths inside our own IT organization, and we believe that encourages them to get in and really learn the business," Burdick said. "That's a huge competitive advantage."

Planning to conclude his career with Kroger at the end of the fiscal year, Heschel, 64, has led the grocery store chain’s IT department for the past ten years. On his departure David B. Dillon, Kroger chairman and CEO, said “Through it all, Mike’s leadership and thoughtful counsel have proved invaluable to our organization, and we are grateful for his contributions.”

Heschel is to be replaced by Christopher T. Hjelm, 44, who has more than 20 years of technology leadership experience at high-growth Internet companies as well as in Fortune 500 firms. He served as CIO at Cendant Corp., after time as senior vice president for technology at eBay Inc. and 14 years at Federal Express Corp. as senior vice president and CIO.

Paul Singer, 51, this year won the Retail Systems Alert® Career Achievement Award. He is one of the most respected executives in the retail industry and was one of the first business people to move into the CIO position in the mid-90s.

Target is one of the leading innovators in inventory planning, replenishment, and management and Singer has played a key role in their progression. After gaining degrees in Theology and Music, his early retail career saw him working at Kmart and May Company. Paul joined Target in 1984 as a Business Analyst and went on to hold several positions in merchandising and merchandise planning, before moving to Target Technology Services in 1994. Paul became Chief Information Officer and Senior Vice President of Target Technology Services in 2000.

In 2003, he founded the Target Adoption Network and he is also a board member for the Congressional Coalition on Adoption Institute (CCAI).

Carrefour SA is an international supermarket group headquartered in France, with a global network of supermarkets. It is the second largest retail group in the world in terms of revenue after Wal-Mart.

The Carrefour group pioneered the concept of a hypermarket and opened the first one in 1962 in Sainte-Geneviève-des-Bois, near Paris.

They mainly operate in Europe and Brazil but also have shops in North Africa and Asia.

Metro Group is a diversified retailer and wholesale/cash and carry group based in Germany. It has the largest market share in its home market and is one of the most globalised retail and wholesale corporations. It was established in 1964 by Otto Beisheim.

If all of the group's operations are included for comparison purposes, Metro is Europe's second largest retailer, after Carrefour of France.

If Metro's cash and carry operations, which are its largest division, are not counted as retail, it also ranks behind Tesco.

Top 5 Retailers

Other articles by GDS Publishing