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Sales growth for the world’s top 100 retailers in 2001 was significantly hampered by the global economic slowdown forcing many companies to retrench or divest as profitability became challenging, according to Retail Forward’s The Top 100 Retailers Worldwide 2001, The average growth rate for the Top 100 retailers from 2000 to 2001 dropped to 4 percent, down significantly from the average annual rate of 9.4 percent reported from 1996 to 2001.

As the expected economic recovery has stalled, Retail Forward anticipates slow growth to persist for retailers in 2002 and into 2003 and merger and divestiture activity to pick up steam. “Consumers the world over are driven by a strong need for value and convenience,” comments Ira Kalish, co-author of the report and senior VP/chief economist for Retail Forward. “Retailers that fail to deliver on these are clearly in peril.”

Because most of the world’s top retailers will not be in a position to challenge Wal-Mart on the basis of price, Retail, Forward suggests that the successful retailers will be those that can offer a strong value proposition.

“Retailers need to prepare for slower growth ahead and a more discerning consumer and they need to know when to exit a market when the business environment becomes unsuitable,” Kalish said. “The bottom line is that retailers need to differentiate on the basis of something other than price, while still offering a strong value proposition. And, they will need to seek new customers in new locations with new formats to survive.”
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