WORLD: Brazil tops retail expansion table
Brazil has topped the rankings for global retail expansion among developing nations for the second successive year, driven by its growing middle class economy.
A T Kearney’s Global Consumer Institute 2012 Global Retail Development Index (GRDI) lists the top 30 developing countries for global retail expansion.
It said Brazil’s potential was highlighted by a growing middle class economy, high consumption rates, a large urban population and reduced political and financial risk – as well as a relatively young population and high per capita spending in the apparel and luxury sectors.
Fellow BRIC economies China and India featured in third and fifth places respectively, while Russia fell 15 places to 26th this year.
The upper reaches of the list featured several Latin and South America countries, including Chile in second spot and Uruguay in fourth, with A T Kearney highlighting the region’s “expanding, dynamic retail sector and strong economic growth”.
The company also pointed to Botswana’s entry into the charts at number 20, which it said could be a pre-cursor to sub-Saharan Africa countries emerging as favourable retail markets in the coming years.
The uprisings of the Arab Spring had a negative effect on several countries in the Middle East and North Africa: Lebanon fell 10 places, Morocco seven and Tunisia 12, but UAE, Oman, Kuwait and Saudi Arabia all feature in the top 15.
The report also highlights new countries with small but growing potential, including Georgia, Oman, Mongolia and Azerbaijan – especially in the speciality and luxury sectors.
“Given the accelerated growth rates of developing countries compared to the anaemic growth in European and North American markets, global retailers must have a strategy for expansion into developing markets,” said Michael Moriarty, A T Kearney partner and study co-leader.
“In the past five years, US-based Wal-Mart, France-based Carrefour, UK-based Tesco and Germany-based Metro Group saw their revenues in developing countries grow 2.5 times faster than their home markets.”
Published since 2002, the Global Retail Development Index analyses 25 macroeconomic and retail-specific variables to help retailers devise successful global strategies and identify emerging market investment opportunities.
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