Wal-Mart is still by far the biggest player in the global grocery arena with sales in 2003 of $256 billion, well ahead of second-placed Carrefour with sales of $79.6 billion, but in terms of its growth rate it was one of the poorest performers among the top 30 global operators, according to retail analysts M+M Planet Retail.Indeed, while Wal-Mart's position is likely to remain unassailable, the same is not necessarily true for its nearest rivals, with Europe's old guard (Carrefour, Ahold, Metro) likely to face increasing pressure from fast-growing 'upstarts' such as Schwartz, Tesco and Rewe.
Germany's Schwartz group was the fastest mover in the top 30 last year, with a 36 per cent increase in sales compared to 2002 helping to pull it from 25th to 14th place in the rankings, according to M+M Planet Retail. The growth has been helped by a new focus on its retail operations - hypermarkets, superstores and discount outlets - after the group sold its cash & carry arm in 2002, and the group's highly aggressive price strategy has proven to be particularly successful in capturing consumers in emerging markets across central and eastern Europe.
"Operating both large and small store formats gives Schwarz greater flexibility in building market share once saturation looms, although the discounter has found that it can successfully operate both its store formats in a given country without cannibalising sales, as shown in the Czech Republic, Germany and Poland," said Corinne Millar of M+M Planet Retail.
But the discounter is not the only group to move rapidly up the rankings in 2003. Tesco's growth of 27 per cent made it the second-biggest mover, with improvements in mature markets (the UK), emerging markets (central and eastern Europe, Asia) and new markets (Turkey, Japan) all contributing.
Tesco may be one of only two British groups in the top 30 (the other being Sainsbury), but with sales of $50 billion and a solid sixth place on which to build, it will soon be in a position to challenge Europe's long-time market leaders.
The other major European mover in 2003 was another German group, Rewe, with a 25 per cent increase in sales to $44 billion putting it in eighth place in the 2003 ranking. Rewe's growth was underpinned by the acquisition of Swiss wholesaler-to-food retailer Bon appétit, which contributed around $2 billion to sales.
However, the key source of Rewe's growth last year was discount fascia Penny, which amassed revenue across Europe of just under $10 billion (a remarkable 35 per cent rise on 2002), reflecting the overall growth in discount store operations over the last year as much of the Europe languished in economic depression: M+M Planet Retail data shows said that discount stores showed the biggest growth worldwide in 2003 - some 27 per cent to $113 billion, with German operators such as Aldi and Tengelmann, as well as Carrefour's Spanish unit Dia, joining Rewe and Schwartz at the top of the growth list.
Not to be outdone, Carrefour and Metro continued to strengthen their positions in 2003, with growth of 23 and 25 per cent respectively (although much of this was due to the strength of the euro against the US dollar), despite tough conditions in their domestic markets in particular. There was also double digit growth for several other European players: Auchan, Tenglemann, Aldi, ITM, Casino, Edeka and Leclerc.
Among Europe's poorest performers were Delhaize, whose sales rose by a more modest 9 per cent after difficulties at its US arm, and Sainsbury, whose widely-reported restructuring problems meant that it managed just 7 per cent growth over 2002.
Ahold, meanwhile, managed to maintain its third place in the overall ranking despite the sale of units in Chile, Peru, Paraguay, Malaysia and Indonesia - and indeed the group posted a creditable 7 per cent increase in sales in dollar terms (to $63 billion) despite its major restructuring. But the group is expected to drop below Metro this year as sales are inevitably impacted by further disposals in the US, Spain, South America and Thailand).
But European groups should not be rejoicing quite yet, despite Wal-Mart's apparently sluggish growth, according to M+M Planet Retail. The principal reason for its modest 5 per cent improvement is the sale of the McLane wholesale division which wiped $15 billion off its books, and its core grocery unit showed sales growth of 20 per cent year-on-year, mainly due to the conversion of non-food superstores to the grocery orientated Supercenter format.
And recent hints by Wal-Mart's management that it is ready to take the battle to the Europeans in their home territory - most probably though the roll out of the British Asda fascia into other countries - and the strengthening of its hand in Latin America after buying part of Ahold's Brazilian business, is a clear warning that the previously US-focused group is now looking increasingly to foreign markets to fuel its growth.