The world’s 25 largest retailers saw their cumulative market capitalization fall 1.3% quarter-on-quarter, from $3.37 trillion (€3.1 trillion) in the third quarter of 2022 to $3.33 trillion (3, 08 trillion euros) in the fourth quarter to the latest data from data and analytics company GlobalData.
The decline was largely driven by excess inventory as exponential inflation, rising interest rates and heightened 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, the data showed.
Ragupathi Jaiaraman, Business Fundamentals Analyst at GlobalData commented, “The global retail industry is facing headwinds in the form of rising interest rates and inflationary pressures.
“Rising inventories and supply chain risks are also casting doubt on the sector’s growth prospects.” In contrast, the retail industry is looking towards changing trends such as omnichannel shopping, social commerce and technological innovation.”
Market capitalization decline
In the last quarter of 2022, Amazon lost $294.3 billion (€272 billion) compared to the previous quarter, its biggest drop in nearly two decades.
The company’s performance was affected by various factors, such as supply chain problems, the war in Ukraine and higher costs, as well as a growing preference for in-store (offline) shopping, which also affected most e-commerce sellers overall.
Elsewhere, Nike proved to be the biggest gainer among the world’s 25 largest retail stocks, up 40.4% quarter-on-quarter in 2022Q4.
Jaiaraman explained, “Retail giants Ross Stores, TJKS, Pinduoduo and Inditek reported more than 25% growth in their market capitalization in the fourth quarter. More than 80% of the world’s 25 largest retailers reported growth in their valuation.
“Although home improvement projects declined in the US, Home Depot managed to post 14% quarter-on-quarter value growth in Q4 2022. Alibaba reported growth of more than 10% in its Q4 2022 estimate, thanks to its initiatives to cost optimization and improved operational efficiency”.
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