The creation of global retail groups is set to continue - and any large-scale retailer had better make a decision about who it wants to group with - or face the consequences. In the coming years, cross-border retailing cannot be ignored, says a report from Retail Intelligence.

'Cross-Border Retailing' says that cross-border activity is accelerating and impacting on retail markets around the world. While there may be more foreign fascias on the average high street, shopping centres across Europe are becoming increasingly similar with the likes of the GAP, H&M, Zara, Mango and Benetton ever-present.

Source: Retail Intelligence, 2001

The scale of international activity is also increasing. In addition to the lower cost and risk entry methods, such as franchise, increasingly retail merger and acquisitions are occurring on a global stage. For example, Wal-Mart's acquisition of ASDA and the Carrefour/Promodès deal forming a group of 9,000 stores in 20+ countries.

Cross-Border Retailing demonstrates that internationalisation is furthest ahead in fashion retailing, a reflection of retailers' choice of entry strategies. In terms of sheer numbers of international operations, it is still those who have expanded through franchising and setting up concessions that are furthest ahead. The size of the capital required to develop a wholly-owned business makes this feature of the market inevitable.

Leading global players
Leading Groups by Number of Countries of Operation, 1999/2000

Rank Holding Company Number of outlets Number of countries No of Diff Ops Origin
1 Yves Rocher 234 68 72 France
2 Lacoste 585 62 62 France
3 Max Mara 319 61 61 Italy
4 Escada 215 50 50 Germany
5 Swatch Group 349 50 50 Switzerland
6 Bally 209 49 49 Switzerland
7 Groupe André 621 49 62 France
8 Morgan 364 47 47 France
9 The Body Shop 1397 46 46 UK
10 Wolford 244 46 46 Austria

Source: Retail Intelligence, 2001.

Wholly, or mostly wholly, owned businesses figure further down the table with Gruppo Zara coming in at 22.

Retail Intelligence's report also shows the outstanding success of the French in international markets; in part a reflection of their historical and cultural links with other markets and also a reflection of the difficulties of operating in their competitive home market.

In terms of number of actual operations, European retailers have focused on the Middle East and Asia, however, many of these are small fashion and childrenswear franchises. When the number of actual stores is assessed it is clear that European retailers have set their sights on the large and affluent US market.

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