Do Power Players Rule?

A power player is any U.S. retailer with sales equal to or greater than 10 percent of those of the category leader.

1. Department Stores

Department stores have survived the rise of sectors specializ­ing in narrower product ranges, as well as the challenges of discount stores and other off-price retailers, and finally E-com­merce. Gerald Storch, CEO of Hudson’s Bay, parent of Saks Fifth Avenue and Lord & Taylor, says, “Increasingly, consumers don’t think of stores as physical locations, they think of stores as brands. The opportunity is to customize on a mass scale so you simulate the selling experience on a mobile device.”

2. Drugstores

National healthcare questions have been driving a lot of what has been going on in the drugstore industry. CVS is moving on several fronts: It broadened its pharmacy reach by acquiring Omnicare, which distributes prescription drugs to nursing homes, assisted liv­ing facilities, and so on. CVS has unveiled the makeover of the Navarro Discount Pharmacy sites it acquired. Carrying the banner “CVS pharmacy y mas,” the South Florida stores feature bilingual associates and 1,500+ “trusted Hispanic products.” It also acquired Target’s pharmacy businesses for about $1.9 billion.

3. General Apparel

Fast fashion has been rising among the ranks of apparel retail­ers. “There is an underlying sense of rebellion that comes through in today’s fashion,” notes Marshal Cohen, chief indus­try analyst with NPD Group. “The fashion industry has under­gone one of the most dramatic makeovers in recent history, no doubt influenced by the Millennial consumer.”

4. Home Improvement and Hardware

These have had to deal with some flooring issues. First, it was hardwood laminate flooring that was said to emit formaldehyde in excess of California state standards. Soon after, came a study of vinyl floor tiles, which found that 58 percent of samples bought from large home improvement dealers contained phthal- ates, several forms of which have been banned from children’s products since 2009. The Home Depot clicked on several fronts, including online.

5. Jewelry and Accessories

Signet, which bills itself as the world’s largest retailer of diamond jewelry, acquired Zale Corp. The company now operates stores and kiosks under a variety of banners, including Kay, Jared, and a number of regional brands in its Sterling division, along with Zale, Peoples, and Piercing Pagoda in its Zale division. Zale operations have been growing same-store sales faster than the company as a whole, and Signet expects that to continue.

6. Mass Merchants

Amazon has joined the ranks of mass merchant power players, selling everything from digital downloads to consumer electronics, toilet paper, books, and groceries. Its limited face- to-face interaction with consumers belies Amazon’s vast physi­cal presence around the country, where a network of fulfillment centers puts it near to customers. Amazon’s mass market tactics include spreading same-day delivery to more segments of the population.

7. Supermarkets

Although mergers and acquisitions have been a way of life, grocery remains the most fragmented segment of retailing. Alb­ertsons took over the remnants of Safeway’s network, covering much of North America, and Kroger completed its first full year with Harris Teeter stores under its wing. Then, after A&P and its affiliate brands were forced into bankruptcy in 2015, it was ultimately decided to sell off all the store locations to several major chains.

8. Women’s Apparel

The biggest news was a deal that closed in August 2015— Ascena Retail Group’s acquisition of Ann Taylor and Loft par­ent company Ann Inc. Ascena paid $2 billion to bring Ann Inc. into a diverse stable of brands that included Lane Bryant, Dress Barn, Maurices, and Justice.

Source: Barry Berman, Joel R Evans, Patrali Chatterjee (2017), Retail Management: A Strategic Approach, Pearson; 13th edition.