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RXUK Top500 Build strong retail businesses

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Retailers and brands that stand out in the Capital Value Chain grow their profits and their assets successfully

Retailers add long-term value to their businesses by increasing their profitability and, ultimately, their share prices. The Capital Value Chain focuses on the extent to which retailers’ strategies add value to their businesses – both by increasing profitability over time and by adding long-term assets. The primary KPI for this value chain is return on capital employed (ROCE) or invested (ROCI), while metrics that are deployed in this assessment are focused on retailers and brands’ access to capital – and how that capital enables them to add both data and capability to their businesses.

Retail businesses boost margins by making the most of their assets – and by making more from every part of their business, from customer engagement and transactions through to optimising the effectiveness and efficiency of the services that they offer. They also build in adaptability and flexibility. This enables retailers to respond as customer behaviour changes, while at the same time managing potential risks effectively.

RetailX research findings in this value chain are grouped below through two questions:
• How do Top500 retailers manage their store estates? • How effectively do retailers grow their profits?

The average Top500 retailer or brand has grown its store estate over the last year, RetailX research suggests. This is significant in this value chain for the way in which stores represent more than just a physical asset. Stores also represent a way of storing value through the stock the stores contain, and for the way in which stores enable traders to raise brand awareness and to deliver customer services across sales channels.

However, there is a squeezed middle factor here. The median – or halfway point – retailer has closed one shop within an already smaller store estate.

In 2023, the average Top500 retailer or brand has 104 shops. That’s nine more than last year. As already noted, the median – or halfway point – retailer in the index has a much smaller number, at 17. That’s one less than last year. Together, the figures suggest that the leading retailers both have and add many more stores than the majority of retailers do.

Supermarkets have the most stores, at an average of 616, and a median of 477 – reflecting the presence of the largest supermarket chains across the UK, close to population centres. The average retailer selling DIY and trade tools and equipment has 246 stores, while the median retailer in this category has 176. The average retailer or brand selling maternity and/or children’s products has 361 shops, while the median retailer has 100. Homewares retailers have an average of 103 shops, and a median of 31 shops. Retailers and brands selling jewellery have an average of 67 and a median of 31 shops, while those selling cosmetics have an average of 87 and a median of nine.

Those selling flowers and gifts have an average of 395 shops, and a median of five, and multi-sector retailers have an average of 135 and a mean of four shops. The average consumer electronics retailer has 66 shops, but the median retailer has less than one (0.9). The average marketplace host has 43 shops, but the median retailer has none.


That number of total stores is divided into shops that are run directly, franchise stores and concessions within larger retailers such as department stores and, increasingly, supermarkets. Within the total number of stores, retailers have an average of 42 shops that are run directly. That’s four more than a year earlier. The median retailer has 10 shops, one more than a year earlier. Brands have an average of 25 and a median of 15 stores, while fashion retailers have an average of 17 stores and a median of 13. The average homewares retailer has 93 directly run stores while the median has 10.

Retailers and brands have an average of 8.5 shops that are operated on a franchise basis – although the median retailer doesn’t have any. Retailers and brands also have an average of five concessions – again, the median retailer has none.

The graphics show the extent to which Top500 retailers as a group have boosted both their revenues and profitability over recent years (2019–21 because 2022 figures were not available at the time of going to press). The figures are taken from those Top500 retailers that are publicly listed companies and so report their figures regularly. However, the figures exclude retailers that were previously in the UK Top but which have gone into administration and ceased trading, so removing the poorest performers from the figures.

The figures suggest that listed Top500 retailers have collectively grown their revenues strongly over recent years. Revenue growth grew steadily at around 9% in both 2019 (+9.2% to £21.8bn) and 2020 (9.3% to £23.8bn) before the rate of growth almost doubled in 2021 (+18.2% to £28.1bn).

But while the Top500’s revenues have grown quickly in recent years, profitability has been much more varied. In 2019, profits of Top500 listed grew by 1.9% on the previous year, but in 2020 – the first year of the Covid-19 pandemic, when retail restrictions kept shoppers at home for several months before putting social distancing in place in stores – they collectively declined by 1.1% – before growing quickly in 2021 (+24.9%).

This performance may suggest that retailers as a whole saw their revenues rise during the pandemic – a time when UK customers had little else to spend their money on. However, the cost of responding to changing customer behaviour – by implementing new business models such as expanded ecommerce shopping or socially distanced click-and-collect services – hit profitability in 2021.

Those costs mostly came in 2020, the figures suggest, allowing profitability to take off in 2021, a year in which UK customers again spent part of the year in lockdown and when Top500 retail revenues grew faster than in the first year of the pandemic.

The Capital Value Chain analysis comes from the 2023 RetailX UK Top500 report. Download it here to see the graphics and list of leading retailers and brands in this value chain, as well as this year’s full Top500 listing.

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