For a second year in a row, mind Retail compiled key numbers from annual reports of the world’s largest grocery retailers. We measured turnover, turnover growth, share of online sales, operating margin, net margin and headcount (see methodology). For Schwarz Group (Lidl, Kaufland) and Aldi, mind Retail decided not to wait for publication of annual results, all scheduled for July 2023. This barometer therefore includes the global leaders of Walmart, Costco, Kroger, Target, Ahold Delhaize, Seven & I, Carrefour, Albertsons and Aeon. The German discounters will be added later on.
In grocery retailing, 2022 was marked for consumers by high inflation (11.4% in the U.S.A. on food products in 2022, and 11.9% in the European Union) and shortages, due to the war in Ukraine from February 2022. Hit by less purchasing power, households made trade-offs. Soaring costs have prompted a fall in discretionary spending to focus on necessity. For retailers, 2022 was a good year in terms of sales, which have been driven by inflationary trends and a petrol effect, but not for profitability. “We haven’t seen such sales growth rates for decades. 2023 may be almost as good in Europe, depending on the pace of food dis-inflation during the second half of 2023”, said Clement Genelot, VP Equity Research Retail & E-commerce at Bryan & Garnier. But this has not translated to higher margins, given a negative mix effect on gross margin, and inflationary pressures on OPEX.”
Sales growth boosted by inflation
On average, the sales of retailers in our panel grew by 5.5% in 2022. A year earlier, this figure was 8% on average (including Aldi and Schwarz), because of deferment of leisure and leisure activities due to Covid-19 lockdowns. In the chart below, retailers’ sales are shown in value terms, as operators do not publish any volume data. This information should be read cautiously, taking into account inflation on food and petrol. “In 2022, less than 25% of the retailers’ revenue growth came from petrol and more than 75% came from inflation, as we see flat or even slightly negative volumes”, added Clément Genelot.
