MVI Research Methodology

Scope of MVI’s research:

  • Retail Coverage: 900+ retail accounts across the world with sales and stores growth forecast to 2012 using company reports and MVI’s projection models and research methods that included insights developed by MVI through research on largest retailers and discussions with many industry leaders.
  • Depth of Coverage: Each major retail account is analyzed at the banner & format level and summarized in the aggregate; a total of over 3,000 banners.
  • Retailer Coverage: All retailers with USD1 billion in annual retail sales volume and key format leaders for MVI’s core 50 countries.

Integrated Research

MVI currently tracks over 900 retailers with sales in excess of USD1 billion annually. We glean information from store and market visits, retailer websites, industry websites, news searches in several languages, as well as the regulatory bodies, annual reports and analyst and retailer conference calls.

This information is streamlined and entered into our database, which allows for efficient presentation of only the most relevant information. MVI structures its sales estimates around the RBOMF principle — Retailer, Banner, Ownership, Market, and Format — which allows us to present highly detailed and explanatory analysis. For each retailer that we enter into the database, we break sales, stores and square footage estimates out from 2000-2009E (soon to be through 2012) for every single format and banner in every market that they operate.

MVI is always interested in expanding chain coverage to include retailers that are influential or important at country level. We constantly add new retailers to our analysis. When added, these retailers follow the same standard as the others — our estimates are done on a banner by banner basis.

Forecasts

Methodology: When forecasting sales, stores and square footage figures, MVI utilizes a standardized ramp-up model approach. This helps guarantee consistency across our research. We benchmark retailers against such factors as market and channel performance, and take into account comparable store sales, sales per square foot, historical maturation periods, and retailer past history and objectives. MVI retail sales forecasts exclude foodservice retailers, automobiles and fuel for convenience/gas.

Timing: For updating actual/historical sales and stores numbers, MVI generally updates this information as it is published. Many retailers have fiscal years that end between December and February; hence, pre-audited and audited figures are released generally between one and three months after the year closes. Since the majority of retailers will have actual historical sales figures updated in our system by May 31, we show a year as “actual” vs. forecasted on the website (e.g. 2006, versus 2006E) on June 1.

Ownership Standards

MVI recognizes that we operate in a world of inconsistent and sometimes contradictory information standards. We continuously attempt to report our sales, stores, & selling space figures according to each retailer’s stated reports with few exceptions. However, in order to guarantee consistent reporting, we make standardized distinctions based on the ownership structure of each retail chain.

Parent Company: In our system, we identify the holding company as the “parent company” or “retailer”.

Ownership: In cases where a retailer has partial ownership of a chain, we identify whether the retailer is an “OWNER” or a “PARTNER”. An “owner” designation is given if MVI decides that the parent company has full control to make merchandising and purchasing decisions for the subsidiary chain. A “partner” designation is given if the parent company is only able to influence merchandising and purchasing decisions. If MVI designates the parent company as a “partner” these operations will not be included in the parent company’s total reported sales, stores, and selling capacity. Some notable instances where distinctions are made:

  • Joint Ventures: only one retailer receives the aggregated sales, stores, selling capacity figures.
  • Cooperatives: most cooperatives operate a mixture of closely influenced enterprises and loosely influenced enterprises. MVI only attributes closely influenced enterprises to the parent company.
  • Wholesale Networks: MVI does not include any sales attributed by the parent company that can be classified as wholesale activity. The only exception to this rule is in the Cash & Carry format where it is impossible to distinguish the breakdown of retail customers and business enterprises.
  • Mergers & Acquisitions: MVI tries to estimate the “annualized sales volume” of each acquisition. In these cases, we standardize the calendar years for the “acquirer” and the “acquire” under MVI’s standard fiscal year. If the acquisition occurs in the first three quarters of the acquiring retailer’s fiscal year, the full annual sales volume is attributed to the acquirer for that fiscal year. The acquirer will have no sales volume for that fiscal year regardless of its quarterly cycle. If the acquisition occurs in the fourth quarter of the acquiring retailer’s fiscal year, the full annual sales volume is attributed to the acquire. The acquirer will have no sales volume for that fiscal year. In the following fiscal year, the acquirer will receive the full sales volume.

Financial Figure Standards

MVI databases financial figures for public companies that report these figures (we do not estimate these figures for privately held companies). Standard metrics that we capture include:

  • Revenue
  • Sales
  • Cost of Goods Sold
  • Gross Profit
  • Selling, General & Administrative Expenses
  • Operating Profit (EBIT)
  • Net Interest Expense
  • Income Taxes
  • Company Profit (including minority Interests)
  • Inventory
  • Accounts Payable
  • Comparable Store Sales Growth (sometimes same-store, identical store, or like-for-like store sales)

Note: Not all measures are reported by all retailers.

From these measures, we can calculate a wide variety of key financial metrics to assess a retailer’s business. Please note that both MVI sales forecasts and financial figures are based on the retailer’s fiscal year, we do not adjust to a calendar year.

Currency notes:

  • All Sales numbers are projected in local currency and presented in Current Local Currency or EUROS exchanged into Euros using predetermined rate for the year
  • Currency exchange rates used by MVI are different than the ones used in the Annual Report
  • Currency fluctuations taken into account
  • This can have significant affects on sales figures, especially from markets with unstable currencies