Are the Largest Public Retailers Top Financial Performers? A Longitudinal Analysis (original) (raw)

Over the last two decades, retailing has changed dramatically as larger firms have continued to expand their share of the marketplace. In the USA, total retail sales (adjusted for the Retail Price Index) have more than doubled, the percentage of overall retail sales accounted for by chains has grown from 53 to 65, and the percentage of overall retail sales accounted for by chains with at least 100 establishments has gone from 29 to 40. In fact, firms with at least 100 establishments now account for roughly 62 percent of all US retail chain sales (extrapolated by the author from 1982, 1987, 1992, and 1997 Census of Retail Trade data). The intent of the present study is to determine how well the largest public U.S. retailers performed during the 20-year period from 1982 to 2001. In assessing performance, several measures are employed, included sales and profit growth, profit margins, asset turnover, return on assets, financial leverage, and return on net worth. In addition, the performance of Wal-Mart versus the other largest US retailers is considered. The paper is organized as follows. First, the study’s value is described, including a review of the strategic profit model and the retail performance index. The hypotheses, study methodology, and results are then presented. A discussion of the findings and conclusions are also offered.