The wRatings Corporation, an independent competitive research firm, announced today the results of the annual Most Competitive Retail & Consumer Goods Study, which was sponsored by SAP AG (NYSE:SAP), the world’s leading provider of business software*. In the report, Clorox (NYSE:CLX) rises from #14 in 2007 to #1 in 2008 with a W Score™ of 96.1. Publix, an employee-owned company, is the #1 retailer with a W Score of 92.0. A W Score of 100 means the business built the highest consumer and economic advantages when compared with the 540+ companies in the wRatings national coverage.
Being strong on both the consumer and financial fronts, highly competitive companies are most likely to withstand the economic downturn. For example, Clorox so far has successfully passed on rising commodity costs to consumers because consumers value their stability and usability over rival products. At Publix, consumers prefer shopping at the grocery store because of their superior customer service, something supercenters and warehouse clubs typically lack. No doubt that an employee-owned company helps motivate Publix staff.
“The good news is that across every category in Retail & Consumer Goods, companies are better meeting consumer expectations in 2008 than in 2007,” said Gary A. Williams, CEO & founder of wRatings. “But the economic slowdown has impacted consumer’s willingness to pay more for those improvements. The bright spot is a return to ‘small indulgences’ where consumers will pay for premium coffee, high-grade cosmetics and affordable, quality apparel. Today’s consumer still wants to feel good and look good, even though they can’t spend like before.”
In addition, companies with the greatest competitive strengths in 2008 and beyond are flexing their muscles well beyond their boundaries. “In today’s highly competitive market, we are seeing consumer products and retail companies collaborating much more strategically with each other to deeply understand end consumers,” said Amit Sinha, vice president of Portfolio Marketing at SAP. “We believe that IT can help companies collaborate on consumer insights for faster innovation and coordinate their business processes for maximum efficiency. As shown by this report, industry leaders are leveraging their business networks for competitive advantage through faster innovation and more responsive demand and supply chains.”
The Most Competitive report series from wRatings identifies the best performing companies through a patented method that blends financial and consumer data. To arrive at the rankings, wRatings ask consumers how well companies meet their expectations every quarter. The 2008 Retail & Consumer Goods ratings are based on Q1-2008 data. Specifically, wRatings measures a company's ability to generate sustainable economic profit through competitive moats, or barriers to entry, as rated by consumers. Each W Score blends a company’s historical economic profit with its forward-looking ability to meet consumer expectations.
Stock guru Warren Buffett doesn't invest in a company without a moat to protect its profits. The wRatings approach identifies nine moats that create a durable advantage and measures them in a consistent way across every industry. Just as investors compare key financials between companies, W Scores allow anyone to compare consumer advantages between sectors, industries and companies. The rankings paint a clear picture of those companies projected to perform the best financially and meet their forecasts.
Top 20 Most Competitive Retailers
With consumers easing back on their 2008 spending, retailers strong in non-discretionary spending (e.g. Grocery, Babies), discounting and pure play online are certain to be found in the top 20 Most Competitive Retailers. Yet, 10 of the 20 retailers that fall outside of the traditional "economic downturn" box are bucking the trend. Many of these reported stronger than expected Q1-2008 financial results already, such as Coach, Gap, J. Crew and Staples, although some have provided cautious guidance for the remainder of 2008.
2008 RANK | 2007 RANK | RETAILER | PARENT COMPANY | W | ||||
| 1 | 1 | Publix | Publix Super Markets (3PUSH) | 92.0 | ||||
| 2 | 15 | Coach | Coach Inc. (NYSE: COH) | 88.6 | ||||
| 3 | 64 | Family Dollar | Family Dollar Stores (NYSE: FDO) | 87.6 | ||||
| 4 | 9 | Claire’s Stores | Claires Stores Inc. (NYSE: CLE) | 84.6 | ||||
| 5 | 10 | Staples | Staples Inc. (NASD: SPLS) | 84.4 | ||||
| 6 | 49 | NY & Company | New York & Company (NYSE: NWY) | 83.3 | ||||
| 7 | 46 | Gap | Gap Inc. (NYSE: GPS) | 80.4 | ||||
| 8 | 8 | Michael’s Stores | Michaels Stores Inc. | 79.3 | ||||
| 9 | 5 | Williams-Sonoma | Williams-Sonoma Inc. (NYSE: WSM) | 79.2 | ||||
| 10 | 11 | Petco | Petco Animal Supplies (NASD: PETC) | 78.5 | ||||
| 11 | 3 | Ross Stores | Ross Stores Inc. (NASD: ROST) | 76.7 | ||||
| 12 | 51 | Neiman Marcus | Neiman-Marcus Group (NYSE: NMG.A) | 76.4 | ||||
| 13 | 21 | American Eagle | American Eagle (NYSE: AEO) | 75.0 | ||||
| 14 | 52 | J.Crew | J Crew Group (NYSE: JCG) | 74.7 | ||||
| 15 | 6 | Gymboree | Gymboree Corp. (NASD: GYMB) | 74.6 | ||||
| 16 | 25 | Nordstrom | Nordstrom Inc. (NYSE: JWN) | 74.2 | ||||
| 17 | 20 | NIKETOWN | Nike Inc. (NYSE: NKE) | 74.0 | ||||
| 18 | 58 | Amazon | Amazon.Com Inc. (NASD: AMZN) | 73.4 | ||||
| 19 | 27 | PetSmart | Petsmart Inc. (NASD: PETM) | 72.7 | ||||
| 20 | 17 | Kroger | Kroger Co (NYSE: KR) | 72.4 |
Top 20 Most Competitive Consumer Goods Companies
The Consumer Goods industry remains one of the most competitive in our coverage over the past decade, primarily due to their strong predictability. Yet, CG companies today must do more than tweak their products and marketing to stay competitive. The key is to reach beyond the traditional boundaries of your industry and extend into new territory. For example, Marvel has branched out into movies, animation, direct-to-DVD and online comics to raise visibility and demand for Marvel-branded products.
| 2008 RANK | 2007 RANK | CONSUMER GOODS | PARENT COMPANY | W | ||||
| 1 | 14 | Clorox Products | Clorox Co. (NYSE: CLX) | 96.1 | ||||
| 2 | 22 | Hershey Candy | Hershey Co (NYSE: HSY) | 94.3 | ||||
| 3 | 5 | Scotch Tape | 3M Company (NYSE: MMM) | 93.8 | ||||
| 4 | 1 | Coke/Diet Coke | Coca-Cola Co (NYSE: KO) | 92.1 | ||||
| 5 | 17 | Wrigley Gum | Wrigley (Wm) Jr (NYSE: WWY) | 91.6 | ||||
| 6 | 6 | Campbell Soup | Campbell Soup (NYSE: CPB) | 91.1 | ||||
| 7 | 10 | Sam Adams/SA Light | Boston Beer Inc.(NYSE: SAM) | 90.7 | ||||
| 8 | 2 | Under Armour | Under Armour Inc.(NYSE: UA) | 90.2 | ||||
| 9 | 34 | Estée Lauder | Lauder Estee Cos (NYSE: EL) | 86.7 | ||||
| 10 | 8 | Colgate Toothpaste | Colgate-Palmolive (NYSE: CL) | 86.0 | ||||
| 11 | 16 | Heinz Ketchup | Heinz (H J) Co (NYSE: HNZ) | 85.9 | ||||
| 12 | 18 | Avon | Avon Products (NYSE: AVP) | 84.5 | ||||
| 13 | 3 | Mountain Dew/Diet MD | PepsiCo Inc. (NYSE: PEP) | 84.4 | ||||
| 14 | 7 | SoBe Adrenaline Rush | PepsiCo Inc. (NYSE: PEP) | 83.9 | ||||
| 15 | 29 | Starbucks Coffee | Starbucks Corp (NASD: SBUX) | 82.0 | ||||
| 16 | 38 | Revlon Cosmetics | Revlon Inc. (NYSE: REV) | 80.4 | ||||
| 17 | 33 | Kellogg Cereals | Kellogg Co (NYSE: K) | 80.2 | ||||
| 18 | 15 | Marvel-branded Products | Marvel Ent. (NYSE: MVL) | 80.2 | ||||
| 19 | 9 | Pepsi/Diet Pepsi | PepsiCo Inc. (NYSE: PEP) | 79.5 | ||||
| 20 | 13 | Corona / Corona Light | Grupo Modelo | 79.1 |
The 2008 edition of Most Competitive Retail & Consumer Goods companies shows a breakdown of the top 20 in each industry, unveils critical trends in consumer expectations and pricing power, and spotlights several companies in the top 20. SAP is offering a complimentary version of the report for a limited time here: http://www.sap.com/usa/industries/consumer/index.epx.
Basic subscriptions to the wRatings data are complimentary, including access to the Top 40 Most Competitive Companies since 2002, which is available at https://www.wratings.com/reports.php?s=5. Premium subscriptions to detailed wRatings research are available to investors, corporations, marketers and consultants. Individual company reports can also be purchased at the website. To learn about your subscription options or purchase reports, visit www.wratings.com.
About the Most Competitive Reports
The W Report™ series identifies companies projected to “win” more customers and generate economic profit by utilizing patented methods (US Patent 6,658,391) from wRatings. The consumer decision method was profiled in the May 2002 cover article of Harvard Business Review. Rankings use an algorithmic formula originally developed in 1999 and then refined in February 2004. The W Score™ is a percentile ranking of companies using a sliding scale of historical economic profit (2003-2007) and current year's (Q1-2008) total moat score. Economic profit is a company's return on invested capital in excess of weighted average cost of capital. Total moats are from a quantitative consumer interview database and are the sum score of nine areas of competitive advantage. The more moats and higher total moat score indicate a greater likelihood of sustaining a competitive advantage. To be considered in the rankings, companies must have either a dominant market share or wide recognition among the general U.S. population and have publicly available financial data. Industries covered include Automotive, Consumer Goods, Electronics, Financials, Health Care, Home, Media, Restaurants, Retail, Telecom, Travel and Utilities & Gas. The W Report, W Score and wRatings logo are trademarks of wRatings Corporation.
About wRatings Corporation
The wRatings Corporation is an independent competitive research firm based in metro Washington DC. Gary A. Williams, CEO & Founder, and his team have been conducting primary research on an original set of leading indicators that measure competitive advantage since 1999. Gary and his team continually analyze market leading companies to predict their future performance based on 35+ million data points collected using his common framework. For more information, visit www.wratings.com.
(*) SAP defines business software as comprising enterprise resource planning and related applications such as supply chain management, customer relationship management, product life-cycle management and supplier relationship management.
SAP and all SAP logos are trademarks or registered trademarks of SAP AG in Germany and in several other countries.
All other product and service names mentioned are the trademarks of their respective companies.
SAP Forward-looking Statement
Any statements contained in this document that are not historical facts are forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Words such as “anticipate,”“believe,” “estimate,”“expect,” “forecast,”“intend,” “may,”“plan,” “project,”“predict,” “should” and “will” and similar expressions as they relate to SAP are intended to identify such forward-looking statements. SAP undertakes no obligation to publicly update or revise any forward-looking statements. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations The factors that could affect SAP's future financial results are discussed more fully in SAP's filings with the U.S. Securities and Exchange Commission ("SEC"), including SAP's most recent Annual Report on Form 20-F filed with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates.
Contacts:
Beth Green, 703-788-6532
beth.green@wratings.com
