TMC-1999 -- Globalization and restructuring in the commerce sector: Their impact on employment and working conditions

This report has been prepared by the International Labour Office as the basis for discussions at the Tripartite Meeting on the Human Resource Implications of Globalization and Restructuring in Commerce. It reviews the impact of restructuring and globalization in the commerce sector -- and increasing liberalization of the market-place -- especially the emergence of new distribution circuits, the growing use of new information and communication technologies on the personnel in this sector. The report examines the implications of these changes in employment, labour relations and working conditions.

Background to the Meeting

The Meeting is part of the ILO's Sectoral Activities Programme, the purpose of which is to facilitate the exchange of information between constituents on labour and social developments relevant to particular economic sectors, complemented by practically oriented research on topical sectoral issues. This objective has traditionally been pursued by holding international tripartite sectoral meetings for the exchange of ideas and experiences with a view to: fostering a broader understanding of sector-specific issues and problems; developing an international tripartite consensus on sectoral concerns and providing guidance for national and international policies and measures to deal with related issues and problems; promoting the harmonization of all ILO activities of a sectoral character and acting as a focal point between the Office and its constituents; and providing technical advice, practical assistance and support to the latter to facilitate the application of international labour standards in various economic sectors.

At its 267th Session (November 1996) the Governing Body of the ILO decided that a meeting on human resource implications of globalization and restructuring in commerce would be included in the programme of sectoral activities meetings for 1998-99. At its 268th Session (March 1997) the Governing Body decided that the meeting should be tripartite, that it should be composed of 75 participants and that the following 25 countries should be invited: Burundi, Canada, China, Colombia, Cyprus, Czech Republic, Egypt, France, Germany, Ghana, Italy, Japan, Republic of Korea, Luxembourg, Madagascar, Mali, Nepal, Nicaragua, Peru, Portugal, Slovenia, Suriname, Switzerland, Thailand and Turkey. It was also proposed to place the following countries on a reserve list from which further invitees would be drawn in the event that a government in the first list declined the invitation: Algeria, Argentina, Benin, Brazil, Croatia, Dominica, Ethiopia, Finland, Grenada, Guatemala, Morocco, Nigeria, Tunisia, United Arab Emirates, United Kingdom, Zambia. Furthermore, 25 private employers' and 25 workers' representatives were invited. The Governing Body decided that the purpose of the Meeting would be to exchange views on experience of the emerging circuits of distribution and their impact on employment and working conditions of commerce personnel; to draw up practical conclusions that include guidance and proposals for further action; and to adopt a report on the discussion. The Meeting may also adopt resolutions.

Background to the report

Technological breakthroughs, the international mobility of enterprises and rapidly spreading competition-driven changes are now deeply affecting the organization and human resource strategy of commercial firms. Due to globalization and the growing interdependence of markets, an increasing proportion of the world labour force is engaged in activities that are linked to international trade and capital flows. The number of workers employed in export- and import-competing industries has grown significantly. Labour markets have thus become more and more interlinked. One of the main reasons productivity has grown faster in wholesale/retail trade than in other sectors since the early 1970s is that wholesalers and large retail chains have invested heavily in information technology (IT).

Technological changes, coupled with a steady decline in communication and transport costs, have thus been a major factor behind global integration. Governments are increasingly seeking to improve the international competitiveness of their economy rather than shield it behind protective walls. Developing countries have made tremendous progress in education and steady improvements in physical capital and infrastructure, thus boosting their productive capacity and enabling them to compete in world markets. This shift in development strategy has been reinforced by communication technologies which have made the world easier to navigate. However, the labour and social impact of globalization implies that political, business and union leaders must accept their share of responsibility and pay heed to international labour standards, thus contributing to an improvement in working conditions, including in the commerce sector. This report outlines the social impact of globalization and restructuring in commerce. Chapter 1 shows recent trends in employment in the commerce sector worldwide. Chapter 2 highlights the ongoing process of internationalization, mergers and acquisitions in the commerce sector and their effects on employment, earnings and productivity, while Chapter 3 analyses the ongoing liberalization process in the sector and its effects on employment. Chapter 4 reviews trends and changes resulting from the introduction of new technologies, in particular information technology and electronic commerce and their impact on employment in the commerce sector, while Chapter 5 describes changing consumer demands, new retail formats, and gives indications on training and qualification needs in the sector. Chapter 6 of the report examines the impact of restructuring and globalization on industrial relations in the commerce sector and indicates some of the responses of the social partners to the challenges posed by these processes. The last chapter refers to voluntary initiatives in the commerce sector and discusses the ILO's role in ensuring decent employment and working conditions in the sector. The report concludes with a list of suggested points for discussion.

Acknowledgements

The information on which this report is based comes from a variety of sources. Valuable information was provided by a number of employers' and workers' organizations and the International Federation of Commercial, Clerical, Professional and Technical Employees (FIET), which replied to a questionnaire on issues dealt with in the report. Further contributions to the report were provided by Professor José Paulo Zeetano Chahad (Brazil) and Professor Peter B. Doeringer from Boston University, United States. ILO publications, studies from other international organizations and research institutions were also frequently consulted. The report was prepared on the basis of contributions made by Paula Repo, an external expert, and by an ILO team composed of Claude Duchemin, John Sendanyoye and Brigitte Steck (Salaried Employees and Professional Workers Branch), Frances Papazafiropoulos (Official Documentation Branch) and Messaoud Hammouya (Bureau of Statistics).

The report is published under the authority of the International Labour Office.

Introduction

This report, which deals with the impact of globalization and restructuring in the commerce sector on employment and working conditions, is published only a few months from the advent of the third millennium. What is now referred to as "globalization", which has left such a mark on the social and economic landscape of the end of the twentieth century, is a modern and more extreme form of what has long been a determining factor in the evolution of commerce. It is even possible to discern some sort of continuity from ancient trade routes -- beginning with the caravans, through the Phoenicians' sea-lanes and the Hanseatic towns, to today's electronic commerce. From this perspective, the "information highway" would appear as a modern and more global equivalent of the legendary Silk Road or spice routes. The appearance of general merchandise stores at the end of the nineteenth century and mass distribution chains which flourished from the second half of this century have left a deep imprint on commerce's structure in diverse countries, without for all that completely displacing more traditional forms of distribution. Distance marketing, and more particularly its more recent Internet-based varieties, is in turn engendering fundamental social and economic changes: removal of distance constraints; the absence of physical interaction during the purchase and payment functions; the need to revise education and training policies and programmes; the concurrent destruction and creation of certain categories of jobs as well as the transformation of others, etc.

Often associated with the search for new products or the pursuit of new markets, international trade has often also been, for better or worse, a catalyst for social change. A principal ILO objective has, from the very beginning, been to ensure that international trade contributes to general social progress without adversely affecting working people and their families. Indeed, the Preamble to the Organization's Constitution affirms that "... the failure of any nation to adopt humane conditions of labour is an obstacle in the way of other nations which desire to improve the conditions in their own countries". This principle remains valid today, as confirmed at the 86th Session of the International Labour Conference in June 1998 by the adoption of the ILO Declaration on Fundamental Principles and Rights at Work.

All over the world, globalization and the restructuring of commercial distribution circuits are reinforcing the linkages between internal and external trade. At the same time, there is a parallel growth in informal sector commerce in a number of developing countries. While regulations and rules which govern the operations of commercial actors remain mostly local or national in scope, the expected growth in electronic commerce seems increasingly to call into question the ability of the public authorities to fully impose their prerogatives on national markets. Electronic-based distance transactions are, in effect, less amenable to any kind of control than the transfer of material products. This development increases consumer clout, at least for those with effective purchasing power, while raising a number of new public policy concerns.

In its report to the Tripartite Meeting on Productivity and Employment in Commerce and Offices (1994), the ILO noted that "Enhanced competition, greater consumer consciousness and especially the widespread acceptance of market economics have made governments, employers and workers in all parts of the world more aware of the need to satisfy customer demands in order to thrive in the market-place ..." and that "With global, rather than simply local, competition, new products and services can come on to the market with astonishing speed."⁽¹⁾

It is evident that these developments have a continuing effect on employment, working conditions and industrial relations, not only in commerce but also in such contiguous sectors and related activities as manufacturing, marketing, transport, finance, logistics, management, communications and data processing. There are often high hopes in various countries that increased investment in commerce and the infusion of new commercial technology and know-how would encourage economic growth, directly or indirectly generate significant numbers of new jobs, and contribute to improved working and living conditions. However, these hopes are frequently balanced by contradictory concerns, mainly related to fears of an emergent global social order almost entirely dictated by market forces.

As noted in the Report of the Director-General of the ILO to the 85th Session (1997) of the International Labour Conference:⁽²⁾

By a strange irony of history, the "dawning of a new age" is no longer expected to occur with the end of the class struggle ... This time will only come now once the State has been stripped of its social and economic prerogatives and a global civil society emerges which is answerable only to the laws of economic rationality, itself the sole guarantee of a future so full of prosperity and promises that people forget the harshness of their present circumstances. This new form of the ideology of progress persists in affirming ... that human progress is more important that actual human beings ...

The Report of the Director-General, Juan Somavia, to the 87th Session (1999) of the International Labour Conference⁽³⁾ similarly highlights those concerns when it observes that "Globalization has brought prosperity and inequalities, which are testing the limits of collective social responsibility". This is particularly relevant in the context of globalization and restructuring of commerce, where new technologies and changes in production and distribution systems have led to changes in social consciousness. As stated in the same Report "increasing consumer choice and access to knowledge and new means of communications have made individuals and social institutions not merely subjects but also potential actors in the process of globalization".

1. ILO: Productivity and employment in commerce and offices, Tripartite Meeting on Productivity and Employment in Commerce and Offices, Geneva, 1994, pp. 1 and 6.

2. ILO: The ILO, standard setting and globalization, Report of the Director-General, International Labour Conference, 85th Session, Geneva, 1997, p. 6.

3. ILO: Decent work, Report of the Director-General, International Labour Conference, 87th Session, Geneva, 1999, pp. 1 and 2.

1. Globalization, restructuring and employment in commerce

Whether or not the impact of globalization has yet been fully felt on the employment market at national level it has, in any event, brought about qualitative changes in the global economic environment affecting workers throughout the world. Economic liberalization and restructuring have increased foreign takeovers through mergers and acquisitions, resulting in modern distribution circuits associated with new technology, innovative management styles, different approaches to work and new employment arrangements. However, these developments have yet to fully penetrate the national markets of many developing countries. Traditional commercial structures and trading methods continue to prevail in countries such as Bangladesh, Gabon, Lebanon and Sri Lanka, where few chain stores have emerged and no significant acquisitions or mergers have taken place involving foreign companies with local enterprises. Consequently, both the Confederation of Gabonese Employers (CPG) and the Association of Lebanese Industrialists report that there is little or no visible link in their countries between globalization and employment.

The situation is entirely different in the industrialized countries, where there is growing debate over the magnitude of the impact that trade with low-wage countries is having on national employment. Recent ILO studies suggest that, on balance, trade with developing countries and the relocation of industries have only been minor factors contributing to the rise in unemployment and the declining wages of unskilled workers in the industrialized countries. The job-loss pessimists also overlook the significant reverse benefits that are derived from trade and investment links with developing countries. While, in many cases, economic liberalization undoubtedly gives rise to short- or medium-term social costs, these are outweighed by greater long-term gains compared to the alternative of protectionist policies.

1.1. Some regional trends

The effect that globalization has had on employment in the commerce sector varies throughout the world. Over the past few years the number of workers employed in import and export industries, or those with which they are in competition, has grown significantly, as have the linkages among labour markets worldwide. Despite this increase, however, their number remains small as a proportion of overall employment. In the industrialized countries, for instance, an average of almost 70 per cent of workers are employed in the service sector, most of whose end-products are not easily traded beyond national borders. Similarly, in many low-income developing countries, the bulk of employment remains in subsistence or traditional agriculture or in the urban informal sector -- and the products of these sectors are largely intended for the home market and are only minimally affected by globalization. Nevertheless, the impact of global economic competition is being felt by a growing number of workers, who are apprehensive that intensifying globalization will generate worldwide pressures to lower wages and labour standards.

A major hurdle in assessing employment trends in the commerce sector is the paucity of accurate national statistics. Even in countries in which they are regularly received, most are current only up to 1997. The significant time lag in their receipt means that, while available data are sufficiently appropriate for ascertaining long-term trends, they are deficient when applied to the analysis of the current situation in quantitative terms. Unlike the data on the countries appearing in figures 1.1-1.6, the statistics presented in the statistical annex at the end of the report include not only those for wholesale and retail trade but also those for hotels and restaurants, as this corresponds with Major Division 6 of the International Standard Industrial Classification of all Economic Activities (ISIC, revision 2, of 1968). However, an evaluation of the situation for each of the countries in figures 1.1-1.6 indicates that the inclusion of the hotels and restaurants sector does not significantly affect analysis of the general trend in the wholesale and retail trade.

ILO data shows that, in general, employment in wholesale and retail trade in most industrialized countries has risen over the last few years compared to overall employment. As may be noted from figure 1.1 and figure 1.2, employment in the commerce sector as a proportion of total employment in the industrialized countries varies from 12 per cent (Finland) to 20 per cent (Australia). The sector recorded employment growth in a majority of these countries, with Finland, the Netherlands and Ireland showing the highest gains of more than 4 per cent between 1995 and 1997. However, in Sweden and Portugal the sector lost jobs at the rate of about 1.5 per cent during the same period.

1.1.1. Western Europe

In the European Union, 4.7 million commercial companies, representing 30 per cent of all European enterprises, provide the essential link in the distribution of goods and services between producers and the more than 370 million consumers. An overwhelming 95 per cent of these enterprises are small and medium sized, employing on the average fewer than ten workers each. The commerce sector is the second largest employer in Europe, with more than 22.5 million workers -- accounting for 16 per cent of total employment. In addition, while other sectors have been shedding workers, the commerce sector in the European Union generated 1.5 million new jobs between 1985 and 1995, or half the number of those lost in the manufacturing industry and 15.5 per cent of all new jobs created during the period.

Box 1.1
Employment in the commerce sector in Finland

According to the Employers' Confederation of Service Industries of Finland (LTK), a huge structural change took place during the first four years of the 1990s. Subsequently, from 1994 to 1998 the number of people working in the commerce sector grew as follows:

Year

Retail

Wholesale

Other

Total

1994

125,700

73,400

43,100

242,200

1998

136,900

91,200

46,300

274,400

In line with work tasks which continue to evolve, the priority need for the sector has become a more highly qualified and continuously trained multi-skilled professional workforce. Increased automation did not, as feared, reduce employment in commerce which had declined to a minimum in 1994. Given that Finland has the highest level of card purchases in Europe, workers have long been familiar with direct debit and credit card transactions. Training emphasizes public relations, customer service and data processing skills. Wholesale companies require, in addition, foreign language skills. Efforts continue to be made to continuously raise education standards, and commercial schools provide a three-year business administration diploma which includes six months of practical experience. Stakeholders in the sector are directly involved in planning of the curriculum for the business administration diploma.

Employment in commerce has increased in most Western European countries such as Cyprus, Norway, and Turkey, and stayed stable in France, Italy, Malta and Switzerland.

Box 1.2
Employment in the food retail trade in Switzerland

Consolidation within the food retail trade in Switzerland has resulted in a reduction in the density of commercial enterprises, calculated on the basis of 10,000 inhabitants. Employment has similarly declined. In 1995, the proportion of annual revenue from the food trade for both Migros and Coop was 61 per cent. This may be explained by the market power of these retailers, the range of their product choice as well as the opening of new branches and the extension of floor space of old stores. As in numerous other countries, there has been a replacement of staff by increased floor space since the new self-service systems require less customer service and therefore fewer personnel. According to the Swiss Federal Office for Economic Development and Labour (OFDE), 60 per cent of workers in this segment of the commerce sector are employed in small and medium-sized companies with less than 250 workers, while the rate for all the other segments is 75 per cent. The same agency considers that the only way jobs will be safeguarded from the effects of consolidation in the food retail trade is if the big operators which now dominate the market are able to generate a corresponding number of jobs lost from small retailers.

Source: OFDE.

1.1.2. North America

In North America, commerce's share in total employment increased slightly in Canada but declined in the United States between 1985 and 1997 -- even though the sector generated 4 million new jobs during this period.

Retail trade is one of the largest and most diverse sectors in the United States economy. According to an ILO-sponsored study, in 1996-97, there were 1.6 million retail establishments ranging from gas stations and automobile distributors, to restaurants and food stores, to department and speciality clothing stores. These rang up annual sales of US$2.2 trillion in 1997 and employed over 20 million workers. In relative terms, retail sales amount to about 27 per cent of GDP (S&P, 1998) and almost one in five jobs in the United States economy is in retailing. Retailing has been a growth sector with the number of establishments increasing by about one-third between 1972 and 1992 (S&P, 1998); the sector now surpasses manufacturing as a source of jobs. While growth has required the industry to attract more workers, it remains a relatively low-wage sector with few unions and is dominated by a young, female and poorly educated workforce. Average hourly earnings were approximately $8 in 1996, or about 60 per cent of those in manufacturing. Because retailing is seasonal and many workers are employed only part time, annual earnings rank even further behind those in manufacturing. The most likely skills requirements projected for the sector as a result of globalization are indicated later in this report.

1.1.3. Central and Eastern Europe

In the transition countries of Central and Eastern Europe, globalization and market liberalization have, in some countries such as the Slovak Republic, resulted in sectoral concentration, an increasing number of joint ventures, the entry of international own-brand distribution chains or the increasing role of purchasing centres. The employment impact has, however, not been uniform, with the employment share of the commerce sector increasing in some countries but declining in others.

Figures 1.3 and 1.4 indicate that in the transition countries, the share of commerce in total employment is relatively low compared with other groups of countries. In 1997, it varied from 8 per cent in Hungary to 13.6 per cent in Romania. It may be noted, however, that while total employment declined in these countries, employment in the commerce sector rose on average by 6 per cent annually between 1995 and 1997, with the highest annual growth of 11 per cent recorded by Latvia.

Box 1.3
Employment effects of the entry of multinationals
in the Czech commerce sector

The entry and expansion of multinationals in the Czech domestic market has brought with it a growth in job opportunities. There were over 30 multinational companies active in retail and wholesale trade in the Czech Republic at the end of 1998, employing a total of some 40,000 workers. The largest employers are Euronova (6,000 employees), Julius Meinl (4,000 employees), Delvita (3,000), Tesco (3,000), Plus Discount (2,500), Billa (2,000), Ikea (2,000), Kaufland (1,700) and Spar (1,000).

Most sector workers are in small companies employing one to 19 workers (totalling approximately 250,000), followed by companies with 20-99 employees (about 138,000). In certain instances, entry by multinationals such as Penny and Plus into the domestic market has been employment-neutral as this has occurred through the acquisition of operations from local entrepreneurs. Also in some cases, the disappearance of strong cooperatives, such as five in Northern Bohemia employing a total of 3,000 workers, has contributed to significant job losses in the sector.

New supermarkets and hypermarkets are planned, which will undoubtedly create additional job opportunities. These new stores are owned by multinational companies, with very strong capital investment capabilities and the resources to absorb "temporary losses" over a number of years during an initial period, with the aim of increasing market share. There are therefore concerns for eventual job losses as competition pushes small companies out of business.

Since 1990, when over 400,000 licences for "purchasing and further sale" were issued, the commerce sector has been able to absorb 130,000 workers who had lost their jobs in industry, agriculture and transport. There are fears, however, that the unregulated expansion of multinationals into the domestic commercial distribution network will shortly result in the disappearance of traditional town centres with their small shops, which provide easy access to inhabitants without cars. Similar apprehension is expressed for medium-sized local stores, as these may be unable to react flexibly enough to price reductions and sales promotions by multinational affiliates. Another important drawback to job growth -- overlooked during the process of large-scale privatization -- is the fact that multinational distribution chains do not give sufficient preference to domestically produced goods.

Source: Reply to ILO questionnaire.

1.1.4. Asia and Pacific

During the period preceding the 1997 economic and financial meltdown, the Asia and Pacific region recorded dramatic trade-driven economic and employment growth rates. Between 1985 and 1997, the commerce sector created about 400,000 new jobs in Hong Kong, China, increasing its proportion in total employment by 7.7 points. More moderate gains of between 1 and 5 points were registered in China, Indonesia, the Republic of Korea, Pakistan, the Philippines and Thailand. Commerce's share of employment also increased in Fiji, Malaysia, the Solomon Islands and Sri Lanka, but by much less than in the abovementioned countries. It declined in Bangladesh, India, Myanmar and Singapore. In Australia and New Zealand the rate of employment growth in the commerce sector has been higher than that of overall employment. In Japan, although commerce generated a million new jobs during the same period, its share in overall employment declined. According to the Japanese Federation of Textile, Garment, Chemical, Commercial, Food and Allied Industries Workers' Union (ZENSEN), job creation in the sector expanded up to 1994 and then started to decline from that year to 1997, especially as a result of technological changes (bar codes, increased computerization, logistical advances, etc.). Bipolarization between high-skilled and low-skilled employment, mainly in jobs requiring the accomplishment of repetitive tasks, was increasingly evident. In addition, the recent economic and financial crisis in Asia, where Japanese commercial operators play a major role, has aggravated the difficulties of a number of distributors pushing them towards restructuring of their operations through the shedding of jobs. As a result of a fall in its revenue and heavy indebtedness, for instance, Daiei, a major Japanese retailer, recently embarked on a vast restructuring plan to be implemented over several years. During 1999, the group intends to reduce its workforce through early retirements and the transfer of workers to less well-paid positions in its affiliates.

1.1.5. Latin America and the Caribbean

In Latin America the share of commerce in total employment ranged from 14.6 per cent in Costa Rica to 29.4 per cent in Peru during the 1996-97 period (figure 1.5), while the annual employment growth in commerce was less than that of employment as a whole. Nevertheless, the growth rate has been significant, as may be noted from figure 1.6, which covers a representative number of countries in the region.

With particular regard to the MERCOSUR countries (Argentina, Brazil, Paraguay, Uruguay), disaggregated data in table 1.1 show that the growth of employment in the commerce sector has been higher than or roughly equal to both GDP growth and overall growth in employment, with the exception of Argentina. In Brazil and Uruguay, growth in employment within the commerce sector has been even more rapid than the annual rate of growth of the labour force, thereby helping to relieve pressure on the labour market to create jobs.

Table 1.1. MERCOSUR countries: Production, employment and productivity growth, 1990-97
(non-agricultural sectors, annual rates %)

Country

Argentina

Brazil

Paraguay

Uruguay

1. GDP

5.5

2.8

2.7

4.2

2. Labour force

3.0

2.7

5.6

1.9

3. Total employment

1.8

2.5

5.6

1.4

4. Employment in the commerce sector

0.8

4.8

n.a.

4.5

5. Non-agricultural productivity

3.6

0.3

-2.7

2.8

6. Non-agricultural informal sector¹

1.6

1.9

1.4

0.3

¹ Annual growth of informal employment share. n.a. = not available.
Source: Panorama Laboral '98, ILO, Lima, Peru.

In any case, the evolution of employment in the commerce sector of the MERCOSUR countries has not led to any significant change in the relative share of this sector of total job creation, as may be observed from table 1.2. In this way, given the short period of time under consideration, the evolution of employment in the commerce sector shows a similar pattern of behaviour to that of the output of the sector, whose share of GDP has remained constant in every country.

Table 1.2. Commerce sector: Production and employment in the MERCOSUR countries, 1990-96

Country

Argentina

Brazil

Paraguay

Uruguay

1990

1996

1992

1995

1991

1996

1990

1996

1. Sector production as % of GDP¹

16.0

16.0

7.6

6.8

26.8

26.0

12.6

12.4

2. Sectoral employment as % of total non-agricultural employment

20.4

19.2²

21.0

21.8

n.a.

23.1

18.5

20.8

3. Employment in small firms as % of total employment³

14.9

18.7

24.0

25.2

29.0

29.7

11.0

10.3

4. Urban open unemployment rate (total) (%)⁴

7.5

17.3

4.9

4.6

5.1

5.5

9.2

12.4

¹Argentina: commerce including hotels and restaurants; Brazil: GDP -- factor cost concept; Paraguay: commerce including financial sector; Uruguay: commerce including hotels and restaurants. ² 1997. ³Small firms: enterprises with ten or less employees. ⁴ Argentina: urban area; Brazil: six metropolitan regions; Paraguay: Asuncion area; Uruguay: Montevideo area. n.a. = not available.
Source: Official national statistics.

In line with the trend observed in other countries of Latin America and a number of countries in Asia, the share of commerce sector employment represented by small businesses has risen, as mentioned previously in the text. This trend cannot be attributed solely to growth in open unemployment, since it has been observed both in Argentina, where unemployment levels have risen sharply, as well as in Brazil and Paraguay, where unemployment levels have remained relatively stable. Employment of workers in small service sector businesses, which include commerce businesses, appears to form part of a reorganization of the labour market in response to the challenges that it faces.

As shown in figure 1.7, there was an increase in the volume of employment within the commerce sector from 1996 to 1998 in Brazil, in line with the general service sector trend, while there was a decline in employment in manufacturing industries. It is in the latter sector that the impact of globalization has been most problematic, obliging it to undertake a major structural adjustment in order to boost competitiveness in response to the process of trade liberalization that began in 1990. This, in turn, entailed a sharp increase in labour productivity and a reduction in employment levels. In percentage terms, while there was an overall reduction of 2 per cent in employment, and an 8 per cent reduction in processing industries, commerce sector employment grew by approximately 2 per cent. It may be concluded from this that the formal commerce sector has aided in reducing the negative impact on employment of the restructuring that has occurred in other sectors.

It should nevertheless be noted that the rate of increase of employment in the commerce sector has recently slowed in Brazil. This is due in part to a relative loss of momentum of the Brazilian economy as a whole, following the waning of the consumer euphoria that resulted from the success of the Real Plan. This may be seen in figure 1.8, which shows a sharp reduction in retail employment between 1996 and 1998, while wholesale employment maintained its growth trend during this period. Although this reduction in retail employment may have been influenced by the level of activity, there is strong evidence to suggest an accelerated modernization process for retail sales, most notably as a result of the computerization of many functions that were previously performed by employees. Between January 1996 and November 1998, retail commerce employment fell by some 1.6 per cent while total commerce employment rose by a similar percentage.

Commerce in the Caribbean has generally experienced a drop in employment relative to the overall economy, with losses of between 4 and 6 percentage points recorded in Barbados, Bermuda and Trinidad and Tobago. Less steep losses have been noted in the Bahamas, British Virgin Islands and the Netherlands Antilles.

1.1.6. Sub-Saharan Africa

In Africa, as in other developing regions, globalization and restructuring in commerce are bringing about striking changes. Traditional commercial operators (petty traders, hawkers, etc.) continue to function side by side -- and sometimes in competition with -- modern retailers such as shopping malls and supermarkets, particularly in the major urban agglomerations. However, the lack of any data, let alone reliable up-to-date sector-specific statistics, makes it extremely difficult to determine both the relative weight of commerce in employment and comparative trends of sectoral contributions to the generation of new employment. The meagre data available from a handful of countries in the region indicate that for the period 1985-86 to 1990, the change in commerce's share in employment in sub-Saharan Africa ranged from about ten points in the Central African Republic to a decline of about ten points in Chad. In between these two extremes, there were significant increases in the share of the sector in Botswana, Ethiopia, Kenya, Mauritius, Niger and Swaziland and a slight rise in Zimbabwe. The sector's share of employment declined in Burundi, Côte d'Ivoire, Ghana, Malawi and Togo. Figure 1.9 shows that in South Africa, commerce recorded the third highest employment growth (about 27,000 additional jobs or 3.9 per cent) from 1994 to 1997. During the same period, the only other sectors in the formal economy to make net contributions to employment were other private service sectors (about 34,000 extra jobs or 11 per cent) and the public sector (86,000 more jobs or an increase of 4.8 per cent). Manufacturing lost 95,000 jobs or 6.4 per cent while construction dropped 14.2 per cent (51,000).

1.1.7. The Middle East and North Africa

In the majority of Middle Eastern and North African countries, such as Bahrain, Egypt, Jordan and the Syrian Arab Republic, commerce increased its share in total employment by between 1 and 5 percentage points from 1984 to 1995. The absolute numbers resulting from some of these increases were very substantial since, in Egypt for instance, employment in the sector grew from around 1 million to 1.5 million jobs during the same period, bringing the share of commerce in total employment to 10.3 per cent. However, in others such as Tunisia, the proportion declined slightly.

1.2. The role of the informal sector in employment generation

While it is difficult to determine the exact nature of the relationship between globalization and the continued growth of the informal sector, the fact remains that the sector, much of which is comprised of retail activities, is an important provider of jobs -- sometimes the most important -- in a great number of developing countries. As may be expected of activities which remain, for the most part, unregistered and outside national statistics, informal sector data is difficult to gather and of doubtful accuracy when available. However, according to the ILO's World Labour Report 1997-98, there seems to be a consensus on the steady growth of the informal sector in almost all developing countries, with the exception of the newly industrializing countries (East Asia). In Latin America, for instance, 15.7 million new jobs were generated between 1990 and 1994, of which 8.4 in every 10 were in the informal sector. Informal sector employment grew in the region at an annual rate of 4.7 per cent, compared to 1.1 per cent in the formal sector.

In Asia, it is estimated that the informal sector absorbs between 40 and 50 per cent of the urban labour force, although significant variations may be found between the newly industrializing countries (less than 10 per cent before 1997), and countries such as Bangladesh, where the sector's employment share is as high as 65 per cent. According to the Bangladesh Employers' Federation, there has recently been a loss of jobs in the formal sector due to restructuring. However, employment in the small service industries, which are classified as informal sector and not reflected fully in the official statistics, has increased. In South-East Asia, more and more workers who have lost their jobs in the modern sector as a result of the economic crisis that has shaken the region since 1997 are having to look for survival in the urban informal sector. The quality of these jobs may not be of the same level as those in the formal sector but this employment is, by and large, steady and sustained.

In Benin, as is generally the case in the rest of sub-Saharan Africa, the informal sector represents, after agriculture, the second biggest provider of jobs, and encompasses mainly crafts and micro-commerce. The proportion of informal sector commercial activity carried out in fixed premises is -- at 17.2 per cent -- very much lower than that carried by semi-itinerant operators (40.1 per cent) and hawkers (42.7 per cent). These statistics demonstrate the precarious nature of commercial activity in Benin's urban centres and reflect the situation in other developing countries, where informal commerce only represents one of the elements of a survival strategy for a sizeable number of the population. The Uganda Manpower Survey of 1989 (the latest available data) similarly identified commerce (trade and restaurants) as the dominant segment in urban employment; indeed it accounted for 40.22 per cent of informal sector employment. Table 1.3 highlights the relative employment weight of informal sector segments in Uganda in 1989. It should be noted that the relative share of commerce would certainly be significantly higher if the trading aspects of the non-trade/restaurants activities were taken into account. The importance of the informal sector in employment generation is underlined by the fact that the same survey indicates that while the formal sector accounted for only 5.5 per cent (378,227 jobs) out of a total labour force of about 7 million people, the urban informal sector employed 978,227, representing 13.7 per cent.

Table 1.3. Structure of informal sector activities in selected Ugandan urban centres

Industry

Per cent

Food processing

9.94

Clothes/shoes

10.41

Metal fabrication

9.94

Wood products

5.99

Handicrafts

3.15

Construction

4.26

Garages

1.73

Trade/restaurants

40.22

Transport

4.10

Services

8.99

Other

0.47

NS

0.79

Total

100.00

Source: Uganda National Manpower Survey (table 4.42), 1989.

Informal sector commerce typically includes the selling of various consumer items, such as food, charcoal, firewood, newspapers, books and household items -- which may be sold at kiosks, market stalls and verandas or by means of hawking. It also includes the preparation and serving of food, drinks and meals in small restaurants, kiosks, markets and open spaces (grilling of meat, chicken and corn, etc.). In a number of countries with a significant tourism sector, the selling of locally made carvings and handicrafts in major urban centres is a considerable source of employment and income.

By and large, the dramatic growth of micro-enterprises and the related expansion in the use of casual labour in developing countries has increased the possibility for multinational companies to indirectly utilize the labour of informal sector workers through subcontracting arrangements. Homeworkers and children are often to be found at the very end of extensive global production and distribution chains.

1.3. Some effects of globalization in the commerce sector,
with particular reference to women

Despite the fact that commerce has registered significant net employment growth in industrialized countries, the rate of unemployment in the sector remains higher than for the economy as a whole (figure 1.10). In contrast, as shown in figure 1.11, the rate for the transition economies is substantially lower.

In general, commerce employs more women than other sectors. Women's participation in the sector is highest in a number of countries in Latin America and countries undergoing economic transition; indeed, on average, the proportion of women employed in commerce is higher than for the economy as a whole.

Box 1.4
Employment and gender differentiation in the retail trade in Canada

Retail trade is Canada's second largest employer. In 1993 it accounted for 13 per cent of all paid employment, and employment in the sector continues to experience sporadic growth. Over the years, jobs in retailing have become increasingly feminized and deskilled. Non-standard forms of employment predominate. According to the Canadian Chamber of Commerce, total employment in the retail sector in Canada stood at 1.7 million in 1990, with unemployment from the sector at 6.6 per cent. By 1997, total employment in the sector still stood at 1.7 million but the unemployment rate had dipped slightly to 5.8 per cent.

In 1995 women represented 51 per cent of the retail trade workforce, and 46 per cent of all persons employed in sales occupations. According to figures on the distribution of women workers -- by size of establishment, trade group and occupations -- female employment in the retail trade of Ontario exhibited distinctive features. Women were concentrated in very small enterprises (i.e. with less than five employees) as well as large establishments (i.e. over 500 employees). They were more likely to work in enterprises selling general merchandise, women's clothing, dry goods, drug stores, florist shops and tobacconist shops as opposed to motor vehicle sales and repair companies, and enterprises selling hardware, furniture, appliances, liquor and beer. Women tended to be concentrated in the following occupations: cashier (91 per cent), non-commission salesperson (84 per cent) and tailor/seamstress (73 per cent). Male workers, in contrast, were mainly in commissioned sales positions (74 per cent), and warehouse occupations (95 per cent).

Source: ILO, Multinational Enterprises Programme Working Paper No. 79, 1997.

Although commerce generally experienced a higher loss of jobs relative to the rest of the economy in most industrialized countries in 1997, this situation was the reverse in Australia, Japan and Spain, where losses in commerce were fewer than in other sectors.

Up to the 1970s most discussions on salaried employment were either implicitly or explicitly based on the model of a "standard" employment relationship with the following characteristics: the existence of only one employer and workplace; the existence of an indefinite work contract; full-time work; and the existence of some degree of social and legal protection.

Although even during the 1970s this standard employment relationship was far from universal (especially in many developing countries), non-standard or atypical forms of work are today on the rise in many countries.

According to a study by the ILO Governing Body Working Party on the Social Dimensions of the Liberalization of International Trade, the difficulty in obtaining comprehensive data and differences of definitions in this area make cross-country comparisons difficult. Analyses of trends within countries and within groups of countries are somewhat more reliable. Part-time work has increased since the mid-1970s in most of the countries for which data are available: in the 12 countries that were already members of the European Union in 1987, part-time work, as a share of total employment, rose from 8.9 per cent in 1987 to 10.2 per cent in 1990 and to 12.2 per cent in 1997. Temporary employment has increased since the mid-1980s in all the sample countries except Japan, where it has remained largely unchanged, and the Republic of Korea, where it has decreased substantially. In many developing countries, non-standard employment often takes the form of "unprotected" employment without a written work contract or without legally established social security coverage. Although this kind of "informal" paid work is of course not new, available data for a sample of Latin American countries indicate that unprotected salaried employment has increased in all of them since the early 1990s.

It is hard to tell whether globalization is the main factor responsible for this, but there are reasons to believe that some correlation exists. A more quantitative assessment of the correlation is still largely an issue for future research. In addition to globalization, developments on the supply side have also contributed to the surge in certain forms of non-standard employment, such as part-time work, which is very important in the commerce sector. When it was a question of choice, it has so far been mainly women who have opted for this arrangement, which enables them to combine paid employment with family responsibilities.

In the great majority of countries, women are the most affected by unemployment in the commerce sector. This may be attributed to a number of factors -- but the most significant is their higher representation in low-skilled, part-time and precarious employment. In 1997, among the countries for which data was available, the greatest gender difference in the unemployment rate in commerce was in Poland (4.7 per cent unemployment for the sector as a whole, compared with 18.7 per cent for women in the sector). Among the transition countries, only Latvia and Lithuania had lower rates of unemployment for women in commerce than the overall sectoral rate. Similarly, Australia and the United Kingdom were the only industrialized countries in which women's unemployment in the sector was lower than the overall sectoral rate. In Asia, where employment in commerce has been particularly hard hit in recent years -- and more especially following the 1997 economic and financial crisis -- there are indications of women workers having been disproportionately more affected compared to men, even if hard data is rather limited.

The impact of globalization and restructuring on employment in commerce therefore clearly has important consequences for gender and equality-related policies and initiatives throughout the world.

Box 1.5
The clothing distribution channel in France

Retail trade is one of the most important sectors of the French economy, accounting for 13.3 per cent of employment. Retailing is characterized by low wages, a workforce that is mostly young and female, and a relatively large share of part-time employment. Within the retail sector, clothing retailers account for almost one-half of all employment, 57 per cent of sales, and more than 15 per cent of all firms.

Greater size and the introduction of new computer technology and other modern management practices have dramatically changed the nature of the internal organization of retailers, and of the job duties that are performed. Part-time work is more prevalent, the skill composition of work has been altered, and productivity has increased.

These changes, however, have not stimulated much growth in jobs. Neither have they substantially altered the nature of work in clothing retailing. The retail trade sector remains characterized by low earnings, high female labour force participation (55 to 60 per cent), high employee turnover, and weak unionization. Part-time employment and part-time labour contracts have become more pronounced in recent years, particularly in hypermarkets and supermarkets. The increase of part-time employment is an indicator of labour flexibility for employers, but of "precarious" work for employees.

Today, the clothing retailing sector plays an active role in the traditional textile clothing "filière"; it has completely changed the rules of competition and especially the content of jobs among both producers and retailers. A new model for regulating and controlling clothing commodity channels has been emerging since the early 1990s. It combines flexible production and lean distribution, with a complete mixture of short-term and long-term contracts aimed at the delivery system. Many of the changes in structure and organization of clothing retailing are also being felt through the entire "filière". The largest retailers have had a substantial impact on the upstream apparel and textile manufacturing sectors. These retailers have emphasized the importance of reducing the prices charged by manufacturers, improving the delivery speed and completeness of orders, and the shifting of various additional services to the manufacturing sector. Retailers have also developed new partnerships with subcontractors and have stimulated traditional manufacturers to alter manufacturing practices, relationships between manufacturers and the retail sector, as well as cooperation among manufacturers and subcontractors.

Source: ILO.

The rise in "non-standard" work does not necessarily mean a higher degree of precariousness. Part-time or temporary work may be chosen freely by certain individuals. For example, in 1997, 58.5 per cent of part-timers in the 15 EU countries did not want a full-time job, and a further 9.5 per cent combined part-time work with school education or training. The share of voluntary part-timers was even higher among women.

* * *

This chapter has attempted to demonstrate the extent to which employment growth, in general, and the proportion of employment in commerce in total employment, in particular, have been influenced by globalization and restructuring. It is extremely difficult, however, to establish the exact correlation between globalization and employment in the commerce sector as other economic, political and technological factors need to be taken into account.

The employment situation in the commerce sector generally improved during the 1990-97 period. In a majority of countries the number of workers in the sector increased. Similarly, the proportion of commerce in total employment increased in one country out of two.

The magnitude of commerce's contribution to employment between 1990 and 1997, and hence its importance to economic well-being in different regions of the world, is best viewed in absolute terms. In the 24 industrialized countries for which statistics are available, approximately 6 million new jobs were created in the sector. The sector also generated 1.5 million new jobs in 19 transition economies for which data are similarly available. In the 17 Asian and Pacific countries reviewed, a remarkable 40 million jobs, half of them in China alone, were created during the same period. Six million new jobs were created in 27 countries in Latin America and the Caribbean during the same period.

The share of commerce in total employment for the 35 countries studied was 18 per cent: it accounts for 15 per cent in the industrialized countries, 12 per cent in countries in economic transition, 17 per cent in the countries of Asia, and 20 per cent in Latin America. It is also worth noting that the sector's annual employment growth is significantly higher than for overall employment in a majority of countries. At 6 per cent and 4 per cent respectively, the transition countries and Latin America recorded the highest growth rates for the sector between 1995 and 1997.

The commerce sector's ability to retain the present employment levels or, better yet, to raise its employment capacity will largely depend on the continued increase in purchasing power and economic growth.

Other specific aspects of employment related to the impact of globalization and restructuring are covered in Chapters 2, 3 and 4.

2. Internationalization and new commercial circuits

2.1. Recent trends

Trade in distribution services takes place mainly through both commercial presence and cross-border supply. The two major components, wholesale trade and retailing, are supplied primarily through commercial presence, but this may change in the light of recent technical developments. Trade in franchising and other distribution circuits is usually undertaken on a cross-border basis, whereas commission agent services are supplied cross-border and through commercial presence.

2.1.1. The changing face of retailing

Retailers play a critical role in the marketing process. Not only do they transfer goods from producers to customers, they also channel information back from consumers. The importance of retailing is underlined by its immense size; in the United States alone it employs about 25 million people. The "new-style" retailers seem to have adopted a philosophy and a new operating style. Rather than monitor the inventory of each item themselves, they move much of the responsibility for ensuring product availability to suppliers. Suppliers accomplish this by monitoring sales at the point of sale on a real-time basis through computerized links. They then automatically replenish stock when inventory levels run low. Payments are made through automated bank-to-bank transfers to suppliers, eliminating much paperwork.

Dramatic gains in distribution and marketing efficiency are realized when manufacturers and retailers work together. "Partnering" between these two groups represents a major departure from their previous antagonistic relationship; it recognizes that both are part of a single process -- which can be greatly streamlined and simplified -- for distributing products to customers. Partnering thus provides the advantages of vertical integration without its attendant drawbacks. It has roots in the "quick-response" movement in the clothing industry. In the grocery business, it is known as Efficient Consumer Response (ECR) (see Chapter 4).

Apart from facilitating partnerships, technology is having an impact on retailing inasmuch as electronic shopping is replacing much store-based retailing. For many time-pressured customers, shopping online or via a catalogue for next-day delivery provides greater time value than a trip to the mall or shopping centre.

Catalogue retailers might be the most affected by electronic shopping. Although electronic shopping has some of the same limitations as catalogue retailing, such as delivery times, it can provide customers with much more information than catalogues.

Retailing, entertainment and recreation are also converging. Entertainment companies, such as Walt Disney, Warner Bros., Discovery Communications Inc., Sony and Viacom, are moving into retailing in a big way, while retail developers are rapidly adding entertainment options to their new and existing developments. In the rediscovery of the link between shopping and entertainment, there is a much more explicit focus on using entertainment to differentiate the retail experience from conventional and electronic retailing. Some new retail developments incorporate nightclubs, zoos, virtual-reality rides, comedy clubs, target ranges, musical revues and stadium-style cinemas. Retailing is also converging with learning. Customers can develop expertise in new areas and parents make their limited time with their children more meaningful. Customers come to such stores not just to buy products or learn skills but to browse, socialize and be with other people. They also spend more than in a traditional shopping centre.

Finally, it is expected that regional internationalism will prevail rather than a full-blown globalization of the retail industry. Given that the supply function is not sufficiently globalized, global retailers would have to deal with different suppliers in different parts of the world, erasing much of their scale advantage. Retailers will therefore probably try to dominate a particular area (because of shared costs) rather than spread out thinly throughout the world.

2.1.2. International mergers and acquisitions

Mergers and acquisitions (M&A) are only one approach to internationalization. Alternatively, companies can participate in joint ventures or build up their own foreign subsidiaries through organic growth. However, M&A activity is dominating foreign direct investment (FDI) flows among the leading developed economies.

In 1998, European retailers were the most active purchasers and targets of international retail trade M&A activity. Retail trade was globally the tenth most active industry. The total value of cross-border deals in retailing accounted for $17,967 million in 1998. In the wholesale trade, North America was a more important target than Europe. The total value of cross-border deals in wholesaling accounted for $6,553 million in 1998.

The annual value of international retailing M&As increased from $1,729 million in 1991 to $17,967 million in 1998. The annual value of international wholesaling M&As increased much less, from $1,675 million in 1991 to $6,553 million in 1998.

Among the strongest United States performers in foreign retail markets are:

Wal-Mart, now the largest retailer in Mexico and Canada, with major plans for Germany and Brazil through acquisitions (see box 2.1). The company recently bid £6.7 billion for the United Kingdom's Asda.
The Gap, now with 15 stores in Japan. Next in line for expansion are countries with strong textile industries. The company is contracting with local manufacturers and in adjacent low-wage countries to assure competitive pricing for apparel.
Toys 'R' Us, now the largest toy retailer in Japan, attributing its successes to its sourcing strategy.

Among the strongest European performers in foreign retail markets are:

Metro group AG (Germany), which entered a joint venture with Turkey's largest supermarket retailer and acquired Netherlands retailer Makro. Metro's foreign presence will include the United Kingdom, Spain, Portugal, Greece, the Netherlands, Belgium, the Czech Republic and Poland.
Carrefour SA (France), which grew to 323 hypermarkets worldwide with the opening of its first store in Poland. About 60 per cent of the company's revenues are now generated by its 207 foreign stores.
Pinault-Printemps-Redoute (France) which sees most growth generated by foreign business. The retailer bought a Swedish mail-order firm and 40 per cent of Brylane, the largest United States-based mail-order company. It plans to open buying offices in Hong Kong and Shanghai and expand retail activities and building materials distribution in Latin America.

One retailer in Asia is poised to take advantage of the consumer spending rebound when it occurs:

Jasco Co. Ltd. (Japan) has followed a strategy of diversifying its interests as a local retailer and shopping centre developer. To attract United States companies to its shopping centres, it negotiates major land deals, expanding its operations with local acquisitions. It is also thriving on leveraging cost-saving technology solutions.

Box 2.1
Wal-Mart

Wal-Mart stores in the US

2,435 (includes 565 Wal-Mart Supercenters): during the fiscal year that ended (FYE) 31/1/99, Wal-Mart opened 37 discount stores, closed one, and relocated or expanded two additional stores, and opened 123 Supercenters (including 88 discount store replacements).

SAM'S Clubs in the US

451 clubs: during the fiscal year that ended 31/1/99, Wal-Mart opened eight new Sam's Clubs, and relocated or expanded five additional clubs.

Wal-Mart Stores International

Wal-Mart Stores, Inc. (WMT) operates 704 units: Argentina (13), Brazil (13), Canada (152), Germany (95), Mexico (410), and Puerto Rico (14), and under joint venture in China (3) and the Republic of Korea (4).
During the fiscal year that ended 31/1/99, Wal-Mart opened or acquired 114 international units -- Argentina (4), Brazil (6), Canada (9), China (2), Germany (74), Republic of Korea (4), Mexico (14), and Puerto Rico (1).

History

First Wal-Mart opened in 1962 (Rogers, AR).
First SAM'S Club opened in 1983 (Midwest City, OK).
First Supercenter opened in 1988 (Washington, MO).
First International Store opened in 1991 (Mexico City).

Company trade territory

Wal-Mart serves more than 90 million customers weekly in 50 States, Puerto Rico, Canada, China, Mexico, Brazil, Germany, Argentina and the Republic of Korea.

Total employees

United States -- more than 780,000.
Internationally -- more than 130,000.
Total employees -- more than 910,000 worldwide.

Employment

FYE 31/1/99: 910,000 -- 10% increase over the previous year. In 1997-98 Wal-Mart created 105,000 jobs -- a 16 per cent increase in its workforce.

2.1.3. Leading companies

The largest wholesalers are from the United States and Western Europe. Among the major wholesalers included in the list Global 500, there are, however, only three European ones -- two from Germany and one from Ireland (see table 2.1). Among the list of Global 500 retailers, there are three from Asia and three from Europe. The rest are from the United States (see table 2.2).

Table 2.1. Top wholesale trade companies among Global 500, 1997

Company

Global 500
revenues
rank

Revenues

Profits

$ millions

% change
from 1996

$ millions

% change
from 1996

McKesson Corporation

174

20 857.3

32.8

154.9

15.7

Supervalu Inc.

222

17 201.4

3.9

230.8

31.8

Franz Haniel & Cei. GmbH

226

16 907.1

0.9

177.6

-13.6

Ingram Micro Inc.

233

16 581.5

37.9

193.6

75.0

Fleming Companies Inc.

254

15 372.7

-6.8

25.4

-4.9

Sysco Corporation

281

14 454.6

7.9

302.5

9.2

Bergen Brunswig Corporation

387

11 660.5

17.3

81.7

11.1

Cardinal Health Inc.

415

10 968.0

23.8

181.1

61.9

Edeka Zentrale

465

9 887.3

-8.3

46.8

19.2

Total

-

133 890.4

-

1 394.4

-

Source: Fortune Magazine (New York).

Table 2.2. Top general merchandise companies among Global 500, 1997

Company

Global 500
revenues
rank

Revenues

Profits

$ millions

% change
from 1996

$ millions

% change
from 1996

Wal-Mart Stores Inc.

8

119 299.0

12.4

3 526.0

15.4

Sears, Roebuck and Co.

50

41 296.0

8.0

1 188.0

-6.5

K-Mart Corporation

76

32 183.0

2.4

249.0

0

J.C. Penney Co. Inc.

87

30 546.0

29.2

566.0

0.2

Dayton Hudson Corporation

107

27 757.0

9.4

751.0

62.2

The Daiei Inc.

120

25 882.2

-8.5

9.9

0

Federated Department Stores Inc.

246

15 668.3

2.9

536.0

101.6

Groupe Pinault-Printemps

256

15 280.0

-2.8

488.8

21.1

MYCAL Corporation

262

15 005.8

-7.3

83.2

-39.1

Karstadt Group

300

13 720.4

-14.1

93.6

141.3

Marks & Spencer PLC

308

13 536.5

8.8

1 361.2

13.7

The May Department Stores Co.

344

12 685.0

0.7

775.0

2.6

Takashimaya Co. Ltd.

431

10 463.9

-8.7

67.7

-19.1

Total

-

373 323.1

-

9 695.4

-

Source: Fortune Magazine (New York).

In Europe, the top 20 retailers include retailers from Germany, France, the United Kingdom and the Netherlands. In Asia, Japan is very dominant. Among the top 35 retailers, Australia has two companies and the Republic of Korea one company. The rest are from Japan (see table 2.3). Table 2.4 shows employment in some of the largest retail companies in different countries.

Table 2.3. Top Asian retailers among Asia 1,000, 1998 ($ millions)

Asia Week
1,000
rank

Company

Country

Main business

Sales

Net
profit

Assets

Equity

Market
capitaliz-
ation

29

Ito-Yokado

Japan

Retailing

25 867

582.4

16 318

7 756

22 820

62

Coles Myer

Australia

Retailing

14 305

289.8

4 983

1 872

4 964

74

Woolworths

Australia

Retailing

12 867

207.9

3 039

1 021

3 880

106

Takashimaya

Japan

Department
stores

10 269

68.4

7 312

1 775

2 439

130

UNY

Japan

Department
stores

8 702

106.1

5 123

1 792

3 275

136

Mitsukoshi

Japan

Department
stores

8 413

-320.6

5 165

276

1 302

152

Daimaru

Japan

Department
stores

7 251

11.4

3 603

587

619

231

Seibu Dept. Stores

Japan

Department
stores

5 073

4.2

3 736

98

-

241

Isetan

Japan

Department
stores

4 880

21.2

4 350

990

2 116

267

Marui

Japan

Department
stores

4 531

158.9

6 011

3 265

6 316

279

Tokyu Dept. Store

Japan

Department
stores

4 312

-127.1

3 827

597

232

284

Matsuzakaya

Japan

Department
stores

4 214

-29.7

2 167

637

887

349

Hankyu Dept. Stores

Japan

Department
stores

3 445

9.6

2 804

833

1 144

369

Nagasakiya

Japan

Clothes
retailing

3 226

-35.0

3 144

9

158

484

Kintetsu Dept. Store

Japan

Department
stores

2 491

4.8

1 401

106

-

510

Seven-Eleven Japan

Japan

Convenience
stores

2 371

504.2

4 877

3 514

29 947

512

Parco

Japan

Fashion
stores

2 356

6.8

1 846

429

242

561

Best Denki


	Country
	Argentina	Brazil	Paraguay	Uruguay

1. GDP	5.5	2.8	2.7	4.2
2. Labour force	3.0	2.7	5.6	1.9
3. Total employment	1.8	2.5	5.6	1.4
4. Employment in the commerce sector	0.8	4.8	n.a.	4.5
5. Non-agricultural productivity	3.6	0.3	-2.7	2.8
6. Non-agricultural informal sector¹	1.6	1.9	1.4	0.3
¹ Annual growth of informal employment share. n.a. = not available. Source: Panorama Laboral '98, ILO, Lima, Peru.


	Industry	Per cent

	Food processing	9.94
	Clothes/shoes	10.41
	Metal fabrication	9.94
	Wood products	5.99
	Handicrafts	3.15
	Construction	4.26
	Garages	1.73
	Trade/restaurants	40.22
	Transport	4.10
	Services	8.99
	Other	0.47
	NS	0.79
	Total	100.00
Source: Uganda National Manpower Survey (table 4.42), 1989.


Company	Global 500 revenues rank	Revenues		Profits
Company	Global 500 revenues rank	$ millions	% change from 1996	$ millions	% change from 1996

McKesson Corporation	174	20 857.3	32.8	154.9	15.7
Supervalu Inc.	222	17 201.4	3.9	230.8	31.8
Franz Haniel & Cei. GmbH	226	16 907.1	0.9	177.6	-13.6
Ingram Micro Inc.	233	16 581.5	37.9	193.6	75.0
Fleming Companies Inc.	254	15 372.7	-6.8	25.4	-4.9
Sysco Corporation	281	14 454.6	7.9	302.5	9.2
Bergen Brunswig Corporation	387	11 660.5	17.3	81.7	11.1
Cardinal Health Inc.	415	10 968.0	23.8	181.1	61.9
Edeka Zentrale	465	9 887.3	-8.3	46.8	19.2
Total	-	133 890.4	-	1 394.4	-
Source: Fortune Magazine (New York).


Asia Week 1,000 rank	Company	Country	Main business	Sales	Net profit	Assets	Equity	Market capitaliz- ation

29	Ito-Yokado	Japan	Retailing	25 867	582.4	16 318	7 756	22 820
62	Coles Myer	Australia	Retailing	14 305	289.8	4 983	1 872	4 964
74	Woolworths	Australia	Retailing	12 867	207.9	3 039	1 021	3 880
106	Takashimaya	Japan	Department stores	10 269	68.4	7 312	1 775	2 439
130	UNY	Japan	Department stores	8 702	106.1	5 123	1 792	3 275
136	Mitsukoshi	Japan	Department stores	8 413	-320.6	5 165	276	1 302
152	Daimaru	Japan	Department stores	7 251	11.4	3 603	587	619
231	Seibu Dept. Stores	Japan	Department stores	5 073	4.2	3 736	98	-
241	Isetan	Japan	Department stores	4 880	21.2	4 350	990	2 116
267	Marui	Japan	Department stores	4 531	158.9	6 011	3 265	6 316
279	Tokyu Dept. Store	Japan	Department stores	4 312	-127.1	3 827	597	232
284	Matsuzakaya	Japan	Department stores	4 214	-29.7	2 167	637	887
349	Hankyu Dept. Stores	Japan	Department stores	3 445	9.6	2 804	833	1 144
369	Nagasakiya	Japan	Clothes retailing	3 226	-35.0	3 144	9	158
484	Kintetsu Dept. Store	Japan	Department stores	2 491	4.8	1 401	106	-
510	Seven-Eleven Japan	Japan	Convenience stores	2 371	504.2	4 877	3 514	29 947
512	Parco	Japan	Fashion stores	2 356	6.8	1 846	429	242
561	Best Denki