Owners of the retailers operating as hyper and super
markets operate by selling food and a wide variety of staple foodstuff. Thus it
is categorized as a branch of food and staple retailing industry where the
businesses act as intermediaries to buy such stuff from the manufacturer and
sell them to the final consumers. These are large stores, which sell all the
household stuff including apparel, grocery or may clothe in certain cases. This
sector is valued as of great importance since it comprises of 30 leading companies,
which add the most to their country’s economy. The total worth of US
hypermarket and super centre retail industry is 644 billion$. Wal-Mart, which
is the leading name in the industry, has superstores, which, on individual
basis, cover an area of 150000 square feet to 235000 square feet on
average. For this reason hypermarkets
and super stores choose out of the town, sub urban areas. This sometimes
affects consumers’ accessibility and thus affects the level of its sales. This
point is increasingly considered by many of the owners nowadays as they look
for ways to boost their profit levels. The
global hypermarkets & super centers sector had total revenue of $1,809.0
billion in 2011 and a compound growth rate of 6% between 2007 and 2011 but is
expected to decline to 4% between the financial year of 2011 and 2016.
The year 2010 has been regarded as a year
of sluggish growth for the hypermarkets and super centers sector particularly
in the first half. However with improving macro economic conditions the results
are expected to be better in the up coming years. Among all, Wal-Mart is
expected to benefit from its revised strategy of merchandising in which it
focuses on low priced food items especially at a time when the food inflation
maybe expected to return. It has to overcome some challenges first among which
winning customers over and establishing brand loyalty is of foremost
importance. It needs to correct its current promotional pricing strategy, which
seems to be uncompetitive among those offered by competing retailers and also
incorporate inflation pricing strategies while doing so. Previously, its
failure to do has caused its sales to continuously decline at the rate of 1.8%.
Analysts estimate that winning consumer over by making them realize that their
favorite brand has returned with more viable pricing strategy and other factors
such as ongoing food deflation pressures and increased promotional spending by
vendors will have to be tackled first. Only then consumers will eventually
respond by making Wal-Mart their trusted retailing brand once again.
Among the leading names, Wal-Mart has a price book
ratio of 3.17 US$, Costco Wholesale is next with a price to book ratio of 3.48
and Price Mart has a price to book ratio of 5.45. Often companies with the
lowest ratio are of greatest value to investors. For more information visit
Bidnessc.com, the best online financial platform for comparison.
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