Wesfarmers joins Woolworths in top 20

THE owners of Australia's dominant supermarket chains are fighting for supremacy among the world's largest retailers, with Wesfarmers joining rival Woolworths in the world's top 20.

Wesfarmers, the owner of Coles, charged into 18th position from 21st and is growing faster than Woolworths, which moved up one place to 17th, the latest Global Powers of Retailing Report by Deloitte shows.

The two each achieved more than $US50 billion ($47.5 billion) in revenue at home and in New Zealand, compared with others in the top 20, which derived income from stores located in at least 10 different countries.

Despite difficult global economic conditions, the world's largest retailers prospered - more than 80 per cent of the top 250 posted an increase in retail revenue.

Walmart topped the list with revenue of $US446.95 billion, nearly four times that of second-placed French chain Carrefour, which had sales of $US113 billion.

Revenue of the top 250 retailers rose by 5.1 per cent to $US4.27 trillion in 2010-11, compared with the previous year's 5.3 per cent growth.

But Deloitte said the bleak economic environment that Australian retailers had endured for years was likely to continue this year.

Last year's local sales growth could be attributed to interest rate cuts, carbon tax compensation and other government handouts rather than an improved capacity to spend, it said. The reasons behind the sluggish spending included anaemic jobs growth, a weak labour market, volatile consumer confidence and moderate real wages growth.

Retail conditions were strongest in mining regions such as Western Australia, Northern Territory and Queensland, and weakest in Victoria, South Australia and Tasmania.

David White, a Deloitte Australia partner, said the arrival of global retailers Zara and Topshop, and the expansion plans of Ikea and Costco, were increasing competition.

Australian retailers still held advantages over foreign companies, including a greater knowledge of the local market, but needed a well-planned strategy and response to increased competition, he said.

More global brands are expected to head Australia's way this year, including US retail heavyweights Pottery Barn (Williams-Sonoma) and Abercrombie & Fitch (Hollister).