This past week, Sears announced the closing of another 96 stores following a seemingly continual series of the same type of announcements over the past few years. It is easy to find any number of pundits pointing to various causes of the demise – online shopping being the number 1 culprit.
But others have fought thru the same market environment challenges and have not experienced a Sears-type nose dive.
We looked at the data for some retailers in the Global 5000 database. We first went back to 2010 and looked the revenue for the following retailers and then compared that to their 2018 revenue.
There are a number of interesting stories in this data. The first thing that jumps out is the sheer size of Walmart. It is (and has been for years) the largest company in the world. In the chart below, the red bar is 2010 revenue with the 2018 bar shown in blue. Even back then, Walmart was THE force in the market. The next obvious thing is the growth of Amazon and to a lesser extent, Costco. And Sears was shrinking. Even Best Buy, which went through some challenging times and market shifts, but has not gone into a Sears slide.
To normalize the view, we also set the data in an index view shown below where each company’s 2010 revenue was set to 1000 and then we computed each year’s change over the years thru 2018. This view shows the incredible growth of Amazon. It also shows the shrinkage of Sears.
We’ll leave it to the analysts to dissect the details of why Sears has taken the track it has compared to others, but two things seem clear:
- it is not the market. Others have thrived, the retail market overall has risen not stopped growing.
- you have to adapt to the change. It is no secret – the online wave has been in our face for years and some are learning how to work with it and adapt.
