Rivals vie for Walmart’s lead

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WILTON, Conn. — Amazon is among the companies challenging Walmart as the “power retailer” of the future, according to Kantar Retail’s 2012 PoweRanking report.

Amazon is among the companies challenging Walmart as the “power retailer” of the future, according to Kantar Retail’s 2012 PoweRanking report.

Walmart is still viewed by the manufacturers surveyed for the report as the No. 1 power retailer of the next 15 years, but other companies are challenging its lead. Amazon saw an increase of 9.3 points, placing it fifth as a future power retailer.

The gap is narrowing between the top four power retailers — Walmart, Target Corp., Kroger Co. and Costco Wholesale Corp. — showing how significantly retailing is changing as consumers embrace multiple channels, including value retailers.

The annual PoweRanking study — which is now in its 16th year — included input from 600 chain and manufacturer respondents in the United States to benchmark how they view each other in the most important areas of the supplier/retailer ­relationship.

The overall lesson to be drawn from the study is the importance of customer-centricity to both partners. Those companies that were ranked as best in class had strategies that aligned with those of their partners and placed customers at their heart.

As well as being named the leading power retailer, Walmart retained its top spot in the overall composite ranking, scoring 51.9%, down only 2.3 points from last year.

Value retailers saw significant improvement in their overall composite score, reinforcing the view that they have seen the most growth during the economic downturn. Dollar General Corp. broke into the top 10 with a score of 6.6%, up one point from last year.

Costco, meanwhile, moved up by 0.7 points to 22.1% and fourth place.

In the supplier section, retailers again ranked Procter & Gamble Co. (P&G) “best of the best,” although Unilever made up significant ground on its major rival across a number of individual measures and made the biggest gains.

In the “best of the best” manufacturer composite score, despite losing 6.1 points from last year, P&G’s 32.2% edged out second-place Kraft’s 30%. Unilever moved from fifth to fourth, thanks to a 1.7 point improvement.

Unilever made the biggest gains on P&G in the "most helpful consumer/shopper insights category leadership" section, with retailers crediting the former’s unbiased category reviews, actionable insights, and overall understanding of consumers for their success.

Nestlé made significant progress this year in a number of areas, particularly in the “supply chain management” metric, where the company was up 6.3 points and passed Unilever to take fourth place. The performance reflects Nestlé’s efforts to resolve some of its supply chain challenges.

Amazon has made significant progress, although it still has a way to go before it breaks into the top 10 retailers, said Kantar senior vice president Virginia Valkenburgh.

"But Amazon’s performance is noteworthy in how manufacturers are viewing the future," she remarked.

"Manufacturers see that brick-and-mortar retailers are going to find it hard to compete with Amazon’s combination of convenience, value and understanding of shoppers."

Costco and Dollar General’s improved performance is a sign of how the sluggish economy is driving more shoppers to value stores, according to Valkenburgh. And the trend is unlikely to change.

She added that the time is right for manufacturers to engage in helping differentiate retailers.



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