Walmarts’ Competitors
The main competitors for market share for Walmart within the retail industry in the
United States are Target Corporation, Costco Wholesale Corporation and Carrefour
(seen as Pvt1). The graph below demonstrated the Direct Competitor Comparison, as
at 2008.
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Competitors
Get Competitors for:
DIRECT COMPETITOR COMPARISON
WMT
Pvt1
COST
Industry
TGT
Market Cap:
211.22B
N/A
26.49B
40.20B
3.07B
Employees:
2,000,000
495,2871
79,000
N/A
11.50K
4.20%
N/A
11.30%
3.20%
6.90%
Revenue (ttm):
408.21B
122.58B1
74.22B
65.36B
5.23B
Gross Margin (ttm):
25.37%
N/A
12.74%
29.29%
30.63%
EBITDA (ttm):
31.11B
N/A
2.66B
6.70B
390.95M
Oper Margins (ttm):
5.87%
N/A
2.53%
7.15%
6.39%
Net Income (ttm):
14.41B
2.17B1
1.15B
2.49B
N/A
EPS (ttm):
3.697
N/A
2.594
3.296
2.14
P/E (ttm):
15.01
N/A
23.18
16.50
17.29
PEG (5 yr expected):
1.29
N/A
1.51
1.09
1.36
P/S (ttm):
0.52
N/A
0.36
0.60
0.56
Qtrly Rev Growth (yoy):
Pvt1 = Carrefour SA
COST = Costco Wholesale Corporation
TGT = Target Corp.
Industry = Discount, Variety Stores
1
= As of 2008
The second largest retailer in the USA is Carrefour (behind Wal-Mart), Carrefour
operates more than 15,400 stores under some two dozen names, including
hypermarkets (Carrefour), supermarkets (Champion), convenience stores (Shopi,
Marché Plus), discount stores (Dia, Ed), and cash-and-carry stores (Promocash) in
about 30 countries in Europe, Latin America, and Asia. France, with more than 5,500
Carrefour stores, accounts for more than 40% of the retailer's sales. Carrefour secured
its spot as the #1 European retailer when it merged with food retailer Promodès and
raised its banner over those stores (hoovers.com as accessed 7.4.10).
When compared to the whole of industry, Walmart has maintained consistent sales
despite the global economic crisis that created the downward curve in late 2008 into
early 2009. Using the S&P index as an example against the whole of industry group,
the graph below demonstrates how Walmart stores maintain sales despite their
competitors realising a downturn in trade.
When the S&P500, Nasdaq and Dow are added, the consistency and resilience of
Walmart Stores in the United States is again demonstrated in the graph below.
Five year analysis of Walmarts performance against one of its major competitors,
Costco Wholesale Corporation, demonstrates that Costco is the major competitor in
the retail sector in the United States. Over the five years 2006-2010, Costco has
consistently maintained sales above Walmart as shown in the graph below.
Another fierce competitor is Target Corporation. Again, a five year analysis of
performance of Walmart against Target Corp demonstrates the edge the Walmart has
over Target Corp, and again the resilience through the global economic crisis that
shows Walmart customers are consistent.
Competitors outside the United States are many. In a growth area such as India,
Walmart had been unable to get their foot in the door as a direct result of resistance by
Indias’ own businesses. The quote below is from Business Week on line, May 2006
(as accessed 7.4.10):
Foreign retailers can only operate in India as wholesalers, and local shopkeepers
want to keep it that way. Kishore Biyani, founder of Pantaloon Retail (India) Ltd., the
country's top chain with some $450 million in annual revenue, has been pressing New
Delhi to keep Wal-Mart out. "We are trying to close the back door and the front
door," he says. If Wal-Mart does break in, Biyani won't be its only local rival.
Petrochemical giant Reliance is planning an initial investment of $750 million to set
up 1,000 hypermarkets. The longer it takes Wal-Mart to get clearance from Indian
authorities, the better prepared its local competitors will be.
However, In May 2007, Walmart entered into partnership with an Indian National
company, Bharti Enterpise. Partnering with a native company is one method of
gaining entry into the growth markets of India. The partnership’s first wholesale cashand-carry facility named “Best Price Modern Wholesale” opened in Amritsar in May
2009 (Businessweekinvestor.com as accessed 7.4.10).
Walmart has used the partnership strategy to enter other markets, such as partnering
with Cifera (or “Cafera”) in Mexico in 1991 (www.articlesbase.com as accessed
7.4.10, Hill & Jones, 9th Edition, p252).
Top European retailers
The top 12 European retailers are as below, as accessed from mintel.com 7.4.10.
Company name
1
2
3
4
5
6
7
8
9
Carrefour*
Tesco Plc*
Schwarz Group
Rewe
Edeka Group
Metro Group
Auchan*
Aldi*
E Leclerc
Intermarché/ITM
10
Entreprises
11 J Sainsbury*
Wal-Mart Stores,
12
Inc*
Sales (€ 000)
2005/06
2006/07
63,679,000
50,749,945
35,598,000
34,500,000
31,420,000
26,803,000
29,100,000
28,530,000
26,400,000
2007/08 Web address
67,062,000
56,094,317
40,000,000
39,200,000
32,060,000
29,975,000
29,481,000
29,301,000
27,300,000
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
www.carrefour.com
www.tesco.com
www.lidl.de
www.rewe.de
www.edeka.de
www.metro.de
www.auchan.com
www.aldi.com
www.e-leclerc.com
26,860,000 27,050,000
n/a www.groupedesmousquetaires.com
22,991,479 24,697,868
n/a www.j-sainsbury.co.uk
21,293,170 23,005,525
n/a http://www.wal-mart.com
Walmart has a substantial share of the European market, but well established
companies have a firm hold on the top 10 spots.
In Belgium, the top retailer is the Delhaise group. Their income statement is below in
millions of EUR.
2009
Revenues
19 938
Cost of sales
(14 813)
Gross profit
5 125
Gross margin
25.7%
Other operating income
78
Selling, general and administrative expenses
(4 192)
Other operating expenses
(69)
Operating profit
942
Operating margin
4.7%
Finance costs
(208)
Income from investments
6
Profit before taxes and discontinued operations
740
Income tax expense
(228)
Net profit from continuing operations
512
Net profit
520
2008
2007(1)
19 024
(14 204)
4 820
25.3%
96
18 943
(14 155)
4 788
25.3%
108
(3 962)
(50)
904
4.8%
(213)
11
(3 923)
(36)
937
4.9%
(347)
15
702
(217)
605
(204)
485
479
401
425
United Kingdom
In the United Kingdom, ‘Tesco’ is number one. The world's third-largest grocery
retailer, Tesco runs more than 4,330 stores in the UK (where it's the #1 retailer), and
13 other countries in Europe, Asia, and now also in the US (under the Fresh & Easy
banner. (www.tesco.com as accessed 7.4.10). The main competitors for retail share in
the UK are ADSA, J.Sainsbury & Wm Morrison Supermarkets. Walmart is not
considered a real competitor in the UK.
In Australia, Woolworths is the largest retailer. The 2009 Income statement is below:
Walmart has had few failures in their global expansion. Lessons learnt from the initial
establishment in Mexico were valued and the company took these on board. In China
for example, the culture was for consumers to purchase their items from local
producers. The business model used by Walmart where cheaper items are purchased
elsewhere and shipped in to the stores to be sold did not suit the local consumers.
Strategic Mission & Intent
Sam Waltons’ mission was to ‘work together to lower the cost of living for
everyone….we’ll give the world the opportunity to see what its like to save and live a
better life’. His intent was to do this by establishing large stores with huge purchasing
power, a revolutionary ordering system, his own logistical system to cut costs and so
provide goods at everyday low prices.
This mission has been achieved but at a cost to the reputation of Walmart stores. In
many areas, local producers, locally owned businesses etc have been financially
ruined by the business model used by Walmart. Many townships, and indeed
countries, lobby to keep Walmart out due to the massive increase in unemployment,
lower wages and benefits paid to employees (associates) by Walmart which are felt by
the local communities.
The following is a revised mission statement that takes these inadvertent features into
account: “We will work together to lower the cost of living for everyone in the local
area….we’ll give the region the opportunity to see what its like to save and live a
better life’.