2009 Fortune 500: Unexpected U.S. Retail Industry Rankings Raise Questions

High Rankings of Bad Businesses Lower Status of Annual American Business List

The number of minus signs attached to retail companies on the 2009 Fortune 500 list was not surprising to anyone, but the way those minus-sign companies were moved and ranked on the list was quite surprising to many. An analysis of the U.S. retail industry representatives on this year’s world famous business index raises questions about the true meaning of Fortune’s rankings, and the value of the perceived status associated with it.

After dramatic revenue and profit declines in 2008, it was logical to expect that top U.S. retail companies would see equally dramatic drops in their positions on the Fortune 500 list. Instead, there were many retail ranking shifts that were not only unexpected, but also seemingly illogical.

For instance, despite a staggering 4,122% decrease in year-over-year net profits last year, Rite Aid rose 42 spots on the 2009 Fortune 500 list. The drugstore company’s reward for having the largest percentage of net loss in Fortune’s food and drug stores category was a new elevated position in the top tier Fortune 100. This raises questions about what top tier status really represents. How does designating a company with that kind of performance as one of America’s 100 “best” publicly traded retail companies reflect on the strength of American business as a whole?

Conversely, Fred’s performed admirably in the food and drug category, with a 55% net profit increase. For that achievement, Fred’s dropped 16 spots in the rankings, barely holding onto its Fortune 1000 status. Rite Aid’s $1 billion loss moved it closer to the top of the list. Ten food and drug store companies that returned better earnings were ranked below it, and therefore, were seemingly designated as less valuable.

Much more startling is...