Retail Week’s International Report reveals the UK businesses generating the most international revenue and the tactics being used to expand globally.

UK retailers have become adept at expanding overseas. From franchising to joint ventures, their international strategies are second to none. Retail Week’s list of the UK’s top 10 international retailers - produced as part of Retail Week’s International Report with Manhattan Associates - shows there is plenty to learn from them.

Tesco

Tesco has generally targeted less developed retail markets, entering new countries in a variety of ways including acquisitions and joint ventures. In many cases the grocer eventually acquires full or majority ownership of its business in each country - this happened in South Korea, Malaysia and China.

An important factor of Tesco’s international success has been a relatively high proportion of local management.

However, the grocer has failed to gain critical mass in some markets, most notably Japan and the US.

Its international store network continues to grow and Tesco has more than 3,500 overseas outlets, up from about 3,000 in 2012.

Kingfisher

DIY giant Kingfisher has built up a considerable international empire comprising just under 400 outlets. Its B&Q fascia has a presence in China, though outside the UK Kingfisher mostly trades through the wholly owned Castorama and Brico Dépôt fascias in France, Spain, Poland and Russia.

In April Kingfisher acquired 15-store Romanian DIY retailer Bricostore. It also operates market leader Koçtas in Turkey through a 50/50 joint venture with Turkish conglomerate Koç Holding.

Kingfisher group chief executive Ian Cheshire said in June that 2013 is a good time to expand internationally -economic recovery is on the horizon and property prices are still lower than they were.

Dixons

Dixons has a diverse portfolio spread over three distinct regions: the UK and Republic of Ireland, northern and eastern Europe, and southern Europe, which includes Turkey and struggling online business Pixmania.

Its southern Europe division - where trading has been challenging - encompasses the Greek Kotsovolos chain, in which it holds a 99% stake, and Italian superstore operator Unieuro, in which it has a 90% stake. Dixons has closed underperforming businesses in Spain, Hungary and Poland, but remains committed to Italy and Greece, as management believes these markets will rally in the longer term.

Signet

Despite Signet’s operational headquarters being in the UK, its US operations accounted for about 80% of group turnover in 2012/13. The jewellery group is the market leader in the specialist sector in the US and its success has been attributed to a substantial marketing budget as well as the ability to offer credit through its in-house finance division.

Signet has close to 1,450 outlets and counting in the US. Stores trade primarily under the Kay fascia, which has a comparable positioning to that of Signet’s H Samuel brand in the UK. It also operates several regional fascias and the more upmarket Jared brand.

Carphone Warehouse

Carphone Warehouse Europe operates about 1,600 overseas outlets across seven countries, mostly under The Phone House banner.

Its portfolio includes Spain, Portugal, Germany and Sweden. In recent years, Carphone Warehouse has used a franchise model to expand across mainland Europe, operating 340 franchise stores in early 2013. These shops are mainly in secondary locations and have provided a lower cost route to expansion.

Carphone Warehouse has also recently begun establishing concessions in other retailers’ stores in countries such as the Netherlands.

Primark

Value fashion giant Primark’s international operations span Spain, the Netherlands, Germany, Portugal, Belgium and Austria and accounted for about a third of overall sales in 2011/12, up from just over 20% five years earlier.

Germany is seen as offering great potential for Primark - the market is discount-oriented and few domestic rivals offer the same degree of fashionability as Primark.

Overseas expansion has been supported by the opening of distribution centres in Spain and Germany, the latter providing scope for a move into France by the end of the year.

Burberry

Luxury retailer Burberry has had a global presence for the last 20 years with flagships in fashion capitals around the world. It has especially focused on lucrative Asian markets such as Singapore and Hong Kong.

Over the past decade Burberry has taken direct control in several markets that had previously been developed by third parties such as franchisees, acquiring operations in Japan, Korea and Taiwan and then the 50-strong Chinese franchise store operation in 2010.

It had 469 company-owned outlets as of March this year and 65 franchise stores, mainly in emerging markets.

Marks & Spencer

Marks & Spencer now has 420 international stores in 51 territories in Europe, Asia, the Middle East and north Africa, which are a mix of partly and wholly owned subsidiaries and franchises.

In central and eastern Europe M&S has turned some of its franchised operations into joint ventures, allowing it greater control over its international business. Franchising remains an important route for the retailer however, particularly in emerging markets.

Alliance Boots

In the last few years Boots has established a substantial and diverse international presence, with 554 retail outlets trading in Norway, the Netherlands, Lithuania, Ireland and Thailand.

The company also has associate and joint venture-operated pharmacies in China, Russia, Switzerland, Italy, Portugal, Algeria and Croatia, and there are Boots-branded franchise stores in the Middle East and Sweden.

After merging with US drugstore giant Walgreens in 2012, Boots is part of a business of more than 11,000 company-owned stores across 10 countries.

C&J Clark

Clarks’ most prominent international market is North America, where the company-owned operation accounted for 40%of group sales in 2012/13.

Recently the footwear retailer has expanded via franchises in Europe and Asia - its franchise store count in 2013 is more than double that of 2009, and it has launched localised ecommerce sites for France, Germany, the Netherlands, Spain and the US.

 

The UK’s top 10 international retailers   
      
 2012International sales% of salesUK salesGroup sales
1Tesco£21.32bn32.7£42.80bn£65.2bn
2Kingfisher£6.50bn59.9£4.34bn£10.83bn
3Dixons£4.35bn53.2£3.83bn£8.19bn
4Signet£1.90bn80.9£447m£2.34bn
5Carphone Warehouse£1.80bn54.3£1.51bn£3.31bn
6Primark£1.21bn34.4£2.30bn£3.50bn
7Burberry£1.20bn94.5£70m£1.27bn
8Marks & Spencer£1.07bn10.7£8.87bn£9.93bn
9Alliance Boots£965m4.2£6.71bn£23.01bn
10Clarks£797m57£601m£1.40bn

 

  • The top 10 British retailers are based on international 2012 sales figures and all the businesses are British-owned, or were originally established in Britain and are now foreign-owned, such as Boots. The international sales figures for retailers do not include international operations that have been gained by being acquired by an overseas business.

Download The Retail Week International Report 2013

To find out more about how British retailers are faring internationally, download The Retail Week International Report 2013, which is free for subscribers, at Retail-week.com/internationalreport