The world’s top 25 retailers posted a 1.3% quarterly decline in their cumulative market capitalization from $3.37 trillion (€3.1 trillion) in the third quarter of 2022 to $3.33 trillion (€3.08 trillion) in the fourth quarter. The latest numbers from data and analytics company GlobalData.
The decline was largely driven by excess inventory as exponential inflation, rising interest rates and growing fears of a recession changed consumer behavior.
Amazon, Costco, CVS Health and Avenue Supermarts were among the top 25 companies that reported significant declines in their market capitalization in the fourth quarter, while Nike, Ross Stores, Pinduoduo gained significantly are, the data showed.
GlobalData Business Fundamentals Analyst Raghupathi Jayaraman commented: “The global retail industry faces headwinds in the form of rising interest rates and inflationary pressures.
“Inventories build-up and supply chain risks also cast doubt on the sector’s growth prospects. Conversely, the retail industry is gravitating towards changing trends such as multi-channel shopping, social commerce and technological innovation.”
Decline in market capitalization
In the final quarter of 2022, Amazon lost $294.3 billion (€272 billion) from the previous quarter, its biggest drop in nearly two decades.
The company’s performance has been affected by various factors such as supply chain issues, the war in Ukraine and higher costs, as well as a preference for in-store (offline) shopping, which has also affected most e-commerce retailers.
Elsewhere, Nike emerged as the biggest gainer among the top 25 global retail stocks, with a 40.4% quarter-on-quarter gain in the fourth quarter of 2022.
Jayaraman explained. “Retail giants Ross Stores, TJX, Pinduoduo and Inditex reported more than 25% growth in their market capitalization in the fourth quarter. More than 80% of the world’s top 25 retailers reported an increase in their valuation.
“Although home improvement projects in the US have declined, Home Depot was able to post 14% quarterly valuation growth in Q4 2022. Alibaba reported a more than 10% increase in its valuation in Q4 2022, thanks to. its cost optimization initiatives and improved operational efficiency”.
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