Top 25 global retailers by market capitalization reported a $382 billion loss in their cumulative market capitalization in the first quarter of 2022, according to GlobalData.

The leading data and analytics firm, noted that Amazon, Walmart, Alibaba, Home Depot, NIKE, Lowe’s and Inditex were six companies which cumulatively reported a loss of over $25 billion in their valuation.

The huge loss recorded was partly due to the Federal Reserve’s policy response of a hike in interest rates to taper off the increasing inflationary pressure. This put a dampener on the stock market in the first month of 2022. Retailers such as Amazon, Home Depot, NIKE and Lowe’s were hit the hardest as they all operate in the consumer discretionary section and are more susceptible to economic cycles, GlobalData said.

Keshav Kumar Jha, Business Fundamentals Analyst at GlobalData, said:

“Their businesses tend to be vulnerable to increasing inflation, as it could jeopardize the consumption recovery that began to improve following the pandemic in 2020. Companies have been impacted by the recent geopolitical tensions due to the Russia-Ukraine war, which has caused oil and energy prices to soar, adding to the already increasing inflationary pressure.”
Keshav Kumar Jha

Compared to Q4 2021, Amazon’s market capitalization declined by 1.9 per cent, albeit ranked first in both quarters, reaching US$1.659 trillion in Q1 2022. Walmart’s market capitalization increased by 2.1 per cent on a quarter-on-quarter basis, with a market capitalization of $409.8 billion.

Home Depot Lost Biggest

Home Depot was the only retailer among the top 25 that lost over $100 billion in valuation in Q1 2022. In percentage terms, the company lost 28.6 per cent on a quarter-on-quarter basis. This reflected a decline in market capitalization to US$309.3 billion. Investors appeared to lose confidence in the company’s stock following the modest guidance for full year 2022.

Alibaba also saw a decline in market capitalization to US$296.1 billion, representing 8.3 per cent decline on a quarter-on-quarter basis. NIKE’s market capitalization also declined by 19.3 per cent to US$212 billion. Lowe’s market capitalization declined by 23.2 per cent to US$133.8 billion on a quarter-on-quarter basis.

Meanwhile, there appears to be no end in sight to the Chinese government’s regulatory crackdown on organizations. The evolving regulatory environment in light of the concerns related to the implementation of the Holding Foreign Companies Accountable Act (HFCAA) is influencing the decisions of investors regarding investing in these stocks, which has caused problems for Chinese online retailers including Alibaba, Pinduoduo and JD.com.

The food retailers, Seven & i and Kroger, were the two companies that clocked over 20 per cent growth in their market capitalization. Seven & i’s impressive quarterly performance, alongside increasing investment in digitalization and its focus on the sustainable growth of its franchise, helped the company retain investors’ interest in its stock.

According to GlobalData, a lot of investors purchased Kroger’s stocks buoyed by its impressive performance in Q4 2021 and its focus on digital acceleration to manage supply-chain challenges, thus pushing its market capitalization higher.