The retail industry is poised for growth in 2023, even as soaring inflation, supply chain disruptions, and interest rate hikes pose challenges. As a result, the global top 25 retailers by market capitalization (MCap) witnessed an 8% growth in their cumulative valuation in Q1 2023, finds GlobalData, a leading data and analytics company.
According to GlobalData, retail giants like Amazon, Inditex, Ahold Delhaize, Alibaba, Kering, and adidas posted more than 15% growth in their Mcap in Q1 2023 compared to Q4 2022, whereas CVS Health, JD.com, and Dollar General are the only companies in the top 25 that lost more than 15% in their MCap.
Ragupathy Jayaraman, Business Fundamentals Analyst at GlobalData, comments: “The global retail industry’s growth is set to be driven by social commerce, the metaverse, and experiential retail, despite inflationary pressures and interest rate hikes.”
adidas was the biggest gainer in the top 25 global retail stocks with a 29.5% QoQ growth in MCap in Q1 2023. However, the company anticipates a €1.2 billion hit in its revenue, principally due to the termination of its partnership with Kanye West’s Yeezy brand. Higher discounting, increased marketing expenses, and supply chain costs also added to its woes.
Spanish multinational clothing chain Inditex witnessed a $20 billion surge in its valuation in the first quarter of 2023. Thanks to sales exceeding pre-pandemic levels, the company was able to gain market share considerably. It also eyes further expansion in the US market by opening bigger stores across the country in the next few years.
Despite a minor decline in the middle of Q1 2023, Amazon’s stock gained momentum towards the end of the quarter and reached a valuation of $1.06 trillion compared to $856 billion at the end of Q4 2022. The company largely benefited from the massive pull forward of business from the pandemic in 2020 and 2021, which was impacted by a reversion as customers preferred to shop in stores. With an increased focus on stabilizing profit margins, the retail major focuses on various cost-cutting initiatives and business diversification.
Jayaraman concludes: “Throughout 2023, the global retail landscape is likely to be influenced by various factors such as consumer behavior, technology, consumption habits, and housing prices.”
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