Shops are closed on Sundays. And it could be large-scale retail trade, the apparently more solid one, that suffers the most from it in the panorama of commerce in Italy. The cry of alarm is launched by a study carried out by Bain & Company for Confimprese, which estimates at 34 billion euros in damages to the total turnover of retail companies, if the proposal of the 5 Star Movement of close the shops for 40 Sundays a year. A drop of 13%, to which must be added the risk of losing their jobs for 70 thousand employees in the sector (plus at least another 10 thousand with related industries). Adding to this "tears and blood" forecast is the study prepared by Mediobanca's Research Area on the state of health of large commercial operators in Italy, including the international players present in our country.
The operators examined represent the 97% of the commercial chain market in Italy, which in 2017 had a turnover of 83 billion (net of VAT), with an increase of 4,4% on the previous year and above all with the best performance since 2014. Profits exceeded one billion euros, the best figure since 2013 But all that glitters is not gold: the operating margins of the sector are in fact at historic lows, the return on invested capital fell to 4,8% in 2017, a figure lower than the same cost of capital (6%). and which therefore highlights a market that sells but is becoming saturated, to the detriment of the less performing operators, which surprisingly are precisely those of the large-scale distribution.
In fact, the study divides the market into four broad categories: large-scale retail trade (Gdo), i.e. the large chains managed by Italian or international corporate groups such as Esselunga, Carrefour, Auchan etc; organized distribution, i.e. consortia and unions between small brands which however continue to remain independent; the world of cooperatives; the discount. Then there would also be e-commerce, which however in Italy continues to play a marginal role, compared to the sales of the operators examined (therefore not counting Amazon). From this breakdown it emerges that it is precisely the large-scale distribution that slows down the most, while intermediate brands and discount stores make up the lion's share. The large-scale distribution, as a whole, saw its turnover grow by only 0,2% in 2017, unlike the discounters who travel at almost 10% per year since 2013.
Not only. Of the total revenues of large-scale commercial distribution in Italy, large-scale distribution produces only a little over a quarter, against 33% of organized distribution. But most of all contributes only 2,5% of profits, compared to 44,3% of organized distribution and 34% of discounters, which despite participating in just 15,6% of revenues, according to data processed by Mediobanca. Even the return on invested capital (Roi), which is 4,8% on average, sees large-scale distribution at 3,5% against 19,9% for discounters. “The discounters – he exemplified Gabriele Barbaresco, head of Mediobanca's Research Area – have a Roi comparable to that of the big luxury brands, such as Luxottica and Ferragamo.
The most profitable chain is Eurospin, an Italian company, with a Roi of 23%, which does better than the two German competitors present in Italy in the discount sector, Lidl and Penny Market. On the other hand, the Italian brands of large-scale distribution are doing less well, from Esselunga to Pam. For some reasons, starting with international competition, especially that of the two French giants Carrefour (which has its first foreign market in Italy with over 1.000 points of sale) and Auchan. In fact, all the international groups are also present abroad (the average is 24% of sales abroad), especially with the exception of those in the USA which have a sufficient domestic market, while the Italian large-scale distribution has an exclusively national dimension.
This inevitably has repercussions on turnover: WalMart, which is the only big US to also sell abroad, is the first in terms of revenues among the 18 main world operators analysed, with 413,4 billion. Alone, it invoices more than a country like Austria. Then there is the compatriot Kroger with over 100 billion, Carrefour, the British Tesco and so on. The last of the eighteen, that is, the Spanish one Mercadona, turnover of 21 billion in 2017, more than the first Italian large-scale distribution, Coop with 14,8 billion. With one consideration: Mercadona is among the few European groups, apart from the Italian ones and the British Sainsbury's, to operate only in their own country. However, it has 1.627 points of sale that earn it 8.600 euros per square metre, more than the 4.500 of Carrefour, the 6.900 euros of Tesco and the approximately 4.000 of WalMart and Kroger. The fragmented Italian market has thus ended up favoring the growth of small businesses, but they too are threatened by possible closure on Sundays.
