Tesco is expected bump up the ranks and take second spot in global turnover rankings, overtaking France’s Carrefour, according to retail analyst IGD.
The body’s latest report, Global Retailing: Preparing for Change, reveals that Tesco is set to become the world’s second-largest retailer after Wal-Mart, as it is expected to grow faster than current number two Carrefour.
IGD forecasts suggest a compound annual growth rate (CAGR) of 11 per cent for Tesco between 2007 and 2012, but just seven per cent for Carrefour.
Tesco’s expansion into markets such as China, the US and India will aid the retailer’s growth.
Carrefour is due to grow in markets such as Brazil and China, while its expansion in western Europe slows. Wal-Mart is due to boost its turnover by $100 billion (£68bn) in the next five years.
IGD chief executive Joanne Denney-Finch said: “The next few years are likely to be challenging for the leading global retailers, yet all are well placed to achieve further growth, particularly internationally. Scale alone will not determine who will win in today’s global trading environment. Global retailers must also show increased simplicity, greater efficiency, flexibility and strong brand positioning to succeed.”
IGD predicts that the future will bring a new phase of globalisation, characterised by a more cautious approach and a spotlight on asset performance.
IGD senior business analyst Jonathan Gunz and author of the report said: “Emerging markets will not be immune to the global economic slowdown, yet the pace of growth will continue to outstrip that of the developed world. We estimate that in grocery, retail markets in China and India will each grow at a compound annual rate of 13.2 per cent between 2008 and 2012, exceeding any other country in the top 10. Other emerging markets to watch include Indonesia, Ukraine and Vietnam.”
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