Global Retailers: Strategies in Payments, Banking, Insurance and Assistance Global Retailers: Strategies of the World’s Top 120 Retail Groups in Payments, Banking, Insurance and Assistance Report prospectus October 2015 © Finaccord, 2015 Web: www.finaccord.com. E-mail: [email protected] 1 Global Retailers: Strategies in Payments, Banking, Insurance and Assistance Prospectus contents Page What is the research? 3 What is the rationale? 4 Which 120 retail groups have been researched? 5 Across which countries has research been conducted? 6 What is the report structure? 7 What are the key features of the research? 8 How can the research be used? 9 How can the interactive PartnerBASE™ be used? 10 Who can use the research? 11 What are some of the key findings? 12-15 What is the cost and format? 16 How can the research be purchased? 17 © Finaccord, 2015 Web: www.finaccord.com. E-mail: [email protected] 2 Global Retailers: Strategies in Payments, Banking, Insurance and Assistance What is the research? Global Retailers: Strategies of the World’s Top 120 Retail Groups in Payments, Banking, Insurance and Assistance is a report and accompanying PartnerBASE™ dataset that illustrates the involvement in financial services of 120 leading retailer groups. For these, the study documents in detail their involvement in the fields of payments, banking, insurance and assistance including (where the information is disclosed), the contribution that financial services have made to group profitability in recent years. Among the 120 groups analysed, only ten had no involvement in the areas in scope and for 55 (45.8%) financial services activity can be characterised as central to their wider business strategy by virtue of their ownership of one or more captive or joint venture companies active in one or more of these fields. In addition, both for these and the other 55 groups, whose financial services operations are more operational or limited in nature, product partnerships are logged for each of their retail brands in the following areas: credit / other pay later cards; consumer finance; other banking products (i.e. mortgages, personal loans, savings accounts); insurance and assistance (i.e. accident, dental, health, household, life, motor, pet and other insurance policies plus assistance services); and online payments (including relationships for online accounts). In total, this research covers over 500 individual retail brands belonging to the 120 groups across 45 countries with consideration of almost 1,000 distinct retail operations in total, including those of brands that are present across multiple countries. © Finaccord, 2015 Web: www.finaccord.com. E-mail: [email protected] 3 Global Retailers: Strategies in Payments, Banking, Insurance and Assistance What is the rationale? Finaccord has developed this study as a result of both the growing potential for major retail groups to generate revenues from financial services and the actual increasing activity that many have in this field. Indeed, for over 20 of the 120 leading retailer groups researched that disclose sufficient financial data about their operations in this arena, financial services generated an unweighted average 28.0% of their total group operating profits during the most recent three years and grew at an unweighted average of 7.6% over the same period (as opposed to an unweighted average of 2.8% for total group-wide operating profits). Indeed, while the development of a private-label or co-branded credit card program has often been the first step taken by retailers into financial services, a number of factors are now encouraging broader involvement. These include the increasing willingness of consumers to utilise alternative distribution channels to acquire financial services, consolidation among conventional retail banks which has reduced consumer choice and provided a strong rationale for the creation of retailer- owned banks, and the rapid growth of online retail sales which has given impetus for the development of online payments and other internet-based financial services. © Finaccord, 2015 Web: www.finaccord.com. E-mail: [email protected] 4 Global Retailers: Strategies in Payments, Banking, Insurance and Assistance Which 120 retail groups have been researched? ADEO Dansk Supermarked Home Retail Group Magnit Shoprite Holdings AEON Darty Hudson's Bay Company Marks & Spencer Sobeys Ahold Dashang Group ICA Meijer Sonae Aldi Decathlon IKEA Mercadona Spar Alibaba Delhaize Group Isetan Mitsukoshi Metro (Canada) Staples Amazon Dia J Front Retailing Metro Group Steinhoff International AS Watson Dixons Carphone JC Penney Migros Suning Commerce Group Auchan Dollar General Jerónimo Martins Morrisons SuperValu Bauhaus E. Leclerc John Lewis Partnership Nordstrom Systéme U Beisia EDEKA Katz Group NorgesGruppen Takashimaya Best Buy Edion Kering Office Depot Target Corporation BJ's Wholesale Club El Corte Inglés Kesko Otto Tengelmann Canadian Tire Empresas Ripley Kingfisher Pick n Pay Holdings Tesco Carrefour Eroski Kohl's Corporation Publix The SPAR Group Casino Falabella Kroger Rakuten TJX Cencosud Future Group K's Holding REWE Uny China Resources Holdings Galeries Lafayette L Brands Rite Aid Walgreens Boots Alliance Conad GameStop Les Mousquetaires Rossmann Walmart Coop (Schweiz) Gap Loblaw Companies Safeway Wesfarmers Coop Italia GOME Lojas Americanas Sainsbury's Whole Food Markets Costco Grupo Elektra Lotte Schwarz Gruppe Woolworths (Australia) Couche-Tard Grupo Inditex Louis Delhaize Sears Wu-Mart CVS Caremark H-E-B Lowe's Seven & I X5 Retail Group Dairy Farm International Home Depot Macy's S-Group Yamada Denki © Finaccord, 2015 Web: www.finaccord.com. E-mail: [email protected] 5 Global Retailers: Strategies in Payments, Banking, Insurance and Assistance Across which countries has research been conducted? In order to gather a comprehensive view of the involvement in payments, banking, insurance and assistance of each of the 120 groups, over 500 individual brands belonging to these groups were investigated in the following 45 countries, meaning that the research covered 990 retail operations in total. Argentina Denmark Malaysia Singapore Australia Finland Mexico Slovakia Austria France Netherlands South Africa Belgium Germany New Zealand South Korea Brazil Hong Kong Norway Spain Canada Hungary Peru Sweden Chile India Philippines Switzerland China Indonesia Poland Taiwan Colombia Ireland Portugal Thailand Costa Rica Italy Romania Turkey Czech Republic Japan Russia UK USA © Finaccord, 2015 Web: www.finaccord.com. E-mail: [email protected] 6 Global Retailers: Strategies in Payments, Banking, Insurance and Assistance What is the report structure? 0. Executive Summary: providing a concise evaluation of the principal findings of the report. 1. Introduction: offering rationale, description of methodology, definitions and other related notes. 2. Group Strategy Overview: this chapter begins by presenting data for the total revenues and growth in total revenues of the retail groups in scope before then providing an overview of their involvement in each of credit / other pay later cards, consumer finance, other banking products, insurance / assistance and online payments, simultaneously illustrating the proportion that have established captive or joint venture subsidiaries in each of these fields and the proportion for which involvement in financial services is a core element of group strategy. These elements are then followed by an analysis of the operating profit generated from financial services over three years (typically 2012 to 2014) of the 22 groups reporting this data plus the average contribution made by operating profit from financial services to total group operating profit over the same period for the same groups. 3. Group Strategy Profiles: for each of the 120 retail groups, this chapter is composed of profiles that summarise not only their involvement in financial services, including whether they own captive or joint venture subsidiaries in this field, but also the countries (of the 45 researched) in which they are active, the brands that they operate and the retail categories in which those brands are present. © Finaccord, 2015 Web: www.finaccord.com. E-mail: [email protected] 7 Global Retailers: Strategies in Payments, Banking, Insurance and Assistance What are the key features of the research? Key features of this research include: • concise information summarising the strategic commitment to financial services of 120 of the world’s leading retail groups with coverage of pioneers in this field such as AEON, Carrefour, Cencosud, Falabella, Grupo Elektra, Lotte, Migros, Otto, Rakuten, Ripley, Seven & i Holdings and Tesco; • availability of comprehensive information across 45 countries concerning the involvement in and partnerships for credit / other pay later cards, consumer finance, other banking products, insurance / assistance and online payments of over 500 brands belonging to these groups; • provision of an accompanying interactive PartnerBASE™ dataset that details over 1,700 distinct product initiatives and that is fully customisable, searchable and filterable, enabling patterns to be explored across multiple groups, brands and countries; • analysis of the contribution to group operating profit made by financial services activity over a three-year period for retail organisations that have made financial services a core element of group strategic development – the evidence of this research is that for a number of these organisations, financial services offer an effective