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July 26, 2022

Retailers register $535bn loss in cumulative MCap for Q2 2022

Alibaba saw its valuation improve from $296bn to $616bn year-on-year during the quarter.

Major retailers have reported a loss of 14% to $535bn in their cumulative market capitalisation (MCap) in the second quarter (Q2) of 2022, according to leading data and analytics company GlobalData.

The company revealed that the US-based retailers accounted for a loss of more than 65% in valuation.

Among the 25 retailers, the top six US companies, namely Amazon, Walmart, Home Depot, NIKE, Costco and Target, have all lost more than $25bn in valuation during Q2 2022.

E-commerce giant Amazon recorded the highest valuation loss at more than $100bn, while Walmart, Lowe’s, Nike and Costco each reported declines of more than 20% in their valuation during the same period.

GlobalData also found that six major retailers in the top 25, namely Alibaba, JD.com, Inditex, Pinduoduo, Fast Retailing and Dollar General, reported gains in valuation during the quarter.

Alibaba and Pinduoduo both recorded increases of more than 35% in valuation, with Alibaba seeing its valuation improve from $296bn in Q1 2022 to $616bn in Q2 2022.

GlobalData business fundamentals analyst Ragupathy Jayaraman said: “As a result of the stringent lockdowns resulting from the Covid-19 pandemic, retail firms were able to enhance their e-commerce options.

“Additionally, home improvement and pharmaceutical retailers also benefitted from the pandemic. However, normalcy is returning to markets as more consumers are visiting physical stores.”

GlobalData noted that the ongoing geopolitical conflict between Russia and Ukraine has impacted retailers’ positions due to increases in energy prices.

Inflationary pressures and rises in interest rates by the Federal Reserve also led to a broad selloff in stocks in Q2 2022.

In May, GlobalData released data showing that major retailers reported a $382bn loss in MCap for the first quarter (Q1) of 2022.

Six of the top 25 retailers by MCap saw a loss of more than $25bn in their valuation during the three-month period.