Wal-Mart Wears the Crown

Stores, the National Retail Federation's magazine, recently released its list of the top 100 largest retailers based on 2002's sales results. The usual suspects occupied the top three slots, but there was a bit of shuffling down below.

Wal-Mart (NYSE: WMT), unsurprisingly, headed the list. From the looks of it, don't expect the Arkansas giant to be supplanted by another retailer anytime soon. Its 2002 sales of $246.5 billion (billion!) so outpaces the No. 2's $58.2 billion that it's difficult to imagine a scenario where Wal-Mart doesn't rule. According to an article in the same issue, its stateside sales constituted 6.8% of the U.S.'s total sales last year.

Wal-Mart has changed everything in retailing. Its influence reaches so widely that -- love it or hate it -- you can't deny its presence. In fact, because of the company, Fayetteville, Ark. (which is near Wal-Mart's Bentonville), recently surpassed Las Vegas, Nev., as the fastest-growing place in America. Making Arkansas an economic mecca? Now that's power.

Home Depot (NYSE: HD) took the No. 2 spot, while smaller rival Lowe's (NYSE: LOW) ranked 12th, up two positions from last year. Discounter Target (NYSE: TGT) bumped Sears (NYSE: S) down a notch, nabbing fourth place and dropping Sears to fifth. Target continues to stand out as a fashionable discount destination. Sears, on the other hand, grew sales at a scant 0.9% over the year before, and is trying to resolve some operational challenges.

Warehouse supernova Costco (Nasdaq: COST) leapfrogged two spots, from No. 8 to No. 6, with almost $38 billion in sales last year. It pushed Albertson's (NYSE: ABS) down to seventh place, and troubled Kmart (Nasdaq: KMRT) fell from seventh place to 10th following a 15% drop in sales to $30.7 billion.

Drugstores Walgreen (NYSE: WAG) and CVS (NYSE: CVS) didn't budge, keeping their 11th and 13th spots, respectively. Also staying put was Kroger (NYSE: KR), in the No. 3 position, and Best Buy (NYSE: BBY) with its 15th place ranking.

Three of the main movers -- Target, Lowe's, and Costco -- all share innovation as a common trait for success. They've all differentiated themselves, their products, and their approaches from their larger competitors. Wal-Mart may remain entrenched at the top, but expect these three to keep shaking things up below as time goes on.