Top Retailers use Private Label offerings to attract shoppers.

The most successful retailers in the industry are constantly reinventing themselves to stay one step ahead of the competition, according to the STORES Top 100 Retailers ranking. The report, which is an annual snapshot of the retail industry, ranks companies by revenue and groups them on one chart regardless of the segment or segments in which they operate. STORES is the monthly magazine of the National Retail Federation.

“It’s not enough anymore for retailers to carry the same merchandise as their competition,” said Susan Reda, Executive Editor of STORES. “From their own brand of food to an exclusive line of tools, today’s retailers will get ahead by differentiating their merchandise and offering products that consumers cannot find anywhere else.”

Arkansas-based Wal-Mart again tops the list as the nation’s largest retailer with 2006 sales of $348.65 billion, an 11.7 percent increase over the previous year. In fact, Wal-Mart’s 2006 revenues were greater than those of the next five largest U.S. retailers combined. According to the article, Wal-Mart has remained successful by introducing a line of organic options and focusing on ways to conserve energy and materials.

Home Depot and Kroger retained their second and third spots, respectively, though both companies saw their share of struggles in 2006. Home Depot, which managed to see an impressive gain of 11.4 percent in revenues in 2006 despite the departure of its CEO Robert Nardelli, has been striving to change its corporate culture and maintain strong sales in the face of a current housing slump. Kroger, whose sales rose 9.2 percent to $66.11 billion, remains the subject of takeover talk, though company executives deny the company has any interest in such a deal.

Costco, which advanced a notch to the number four slot, is also pushing the envelope by increasing its private label offerings with a new line of food conceptualized by Martha Stewart. Costco’s sales increased 13.6 percent in 2006 to $60.15 billion. Mass merchants Target (#5) and Sears (#6) are both attempting to differentiate themselves but are moving in different directions.

Target, which advanced a spot in the ranking with a sales increase of 13.1 percent to $59.49 billion, will continue to add more private label food items in its stores. Sears, which dropped two spots despite a 7.9 percent sales increase to $53.01 billion, will be rolling out its Craftsman tools and Kenmore appliances to more Kmart locations this year.

Drug stores are also represented in the top ten retail companies. Walgreen, which rose one spot to number seven, is aggressively adding free-standing store locations and focusing on front-end merchandise. CVS, a new entry to the top ten this year at number nine, acquired Caremark Rx and has promised to “transform the way pharmacy services are delivered.”

Other companies in the top ten include Lowe’s, which dropped one spot to number eight, and Safeway, which retained its spot at number ten.

“SAP is a proud sponsor of this year’s STORES’ Top 100 list and recognizes how important growth and innovation are to the retail industry,” said Jim Mattecheck, senior vice president and General Manager, Retail, SAP America Inc. “Successful companies continuously find ways to offer a differentiated shopping experience that inspires customers to shop with that retailer again and again. SAP has a proven track record of helping retailers achieve their goals. In fact, more than 4,300 retailers worldwide are SAP customers.”

Restaurants Added to STORES Top 100 Retailers List

The most noticeable change to this year’s Top 100 is the inclusion of restaurant companies. The ranking, based on corporate revenues rather than system-wide sales, added six restaurants to the list this year including: McDonald’s (#16), Yum! Brands (#35), Starbucks (#42), Darden Restaurants (#53), Brinker International (#73), and Outback Steakhouse (#80).

“Consumers have changed, but their needs have not,” said Susan Reda, Executive Editor of STORES magazine. “Americans still have to put dinner on the table every night, but now they are looking to restaurants to fill a larger portion of that need rather than relying exclusively on traditional supermarkets. Successful restaurants understand how to cater to today’s consumers, and there are some ideas they’re trying that traditional retailers may want to borrow.”

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