Product mix diversification key to success, NRF survey says
WASHINGTON -- The best retailers are embracing change and diversifying their product mix in order to stay competitive, according to the 2005 Triversity Top 100 Retailers ranking, released by Stores magazine, the monthly magazine of the National Retail Federation (NRF). Convenience stores were represented by 7-Eleven, The Pantry and Casey's General Stores; several dollar store retailers also made the list.
The report is an annual snapshot of the retail industry, ranking companies by revenues and grouping them on one chart regardless of the segment or [image-nocss] segments in which they operate, NRF said.
This past year shook up the retail industry, said Rick Gallagher, NRF vice president. Stores are looking for unique ways to expand their product lines in an effort to differentiate themselves. Retailers are no longer just competing with other stores in their segment, they are competing with everyone, making the environment extremely challenging.
Wal-Mart (No. 1) proved once again to be unbeatable, said NRF, topping the list with 2004 sales of $288.19 billion, an 11.4% increase over 2003.
Home improvement retailers also fared well, as consumers continued to buy do-it-yourself goods and take advantage of customized services, which allowed Home Depot to hold on to its No. 2 spot with 2004 sales of $73.1 billion, a 12.8% increase over 2003. Lowe's also moved up the list to the No. 8 spot, with sales of $36.46 billion, an 18.2% jump from the previous year. As reported in CSP Daily News last week, Home Depot is planning to test a c-store concept on its sites.
Successfully integrating luxury items with discount goods kept mass merchandisers Costco (No. 4) and Target (No. 5) near the top. Costco, which offers everything from Picasso prints and French wine to bath towels and beauty products, retained their customer base with low prices, wide selection and one-stop shopping. Target, after shedding Mervyn's and selling Marshall Field's to May, added grocery and drug merchandise to its shelves while retaining its trendy appeal.
Big grocery chains have also expanded their product mix in an effort to maintain their ground, after facing increased competition from new price-impact grocers like Trader Joes (No. 61), which offers an eclectic range of natural and organic gourmet foods. Kroger (No. 3) moved into gasoline sales with more than 500 fuel centers and is working on a number of different formats, including fresh markets and two marketplace stores.
Safeway (No. 10) differentiated itself from other supermarkets by rolling out lifestyle stores with natural and organic foods and new ambience for the modern consumer, and Albertsons (No. 6) unveiled Renaissance drug stores and is testing deep discount Super Saver grocery stores.
Walgreen's turned the consumer's desire for a unique, personalized shopping experience into a successful year, jumping up two spots to No. 7 and beating out major competitors CVS (No. 11) and Rite Aid (No. 17). Striving to stand apart from other pharmacies, Walgreen's has expanded its wellness services by featuring beauty consultants patrolling store aisles to assist customers and growing its network of stores at the rapid pace of one per day over the last fiscal year.
Department stores are proving their staying power as well, reinventing their identity and shedding the image of mall anchors. Sears (No. 9), the only major department store to make the list's Top 10, is increasing its number of freestanding stores, as it continues expand Sears Essential units, while JCPenney (No. 16) is renewing its focus on its department store and catalog operations.
7-Eleven ranked at No. 26, The Pantry at No. 68 and Casey's at No. 80' Dollar General was No. 26, Family Dollar was No. 47 and Dollar Tree was No. 75.
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