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AT Kearney Tracks Global Retail Development

Posted: June 12, 2012

A.T. Kearney’s Global Consumer Institute released its 2012 Global Retail Development Index (GRDI), a ranking of the top 30 developing countries for global retail expansion. Brazil is #1 for the second year in a row, driven by a growing middle class economy, high consumption rates, a large urban population, and reduced political and financial risk. In addition, Brazil’s relatively young population and high per capita spending in the apparel and luxury sectors make this country a top destination for specialty retailers.

Botswana ranked 20th in this year’s GRDI. Botswana’s entry into the GRDI ranking is a precursor to steadily developing countries in the sub-Sahara Africa region that could emerge as favorable retail markets in coming years.

Although the Arab Spring uprisings had a negative impact on the rankings of several MENA countries including Lebanon (-10 versus 2011), Morocco (-7 versus 2011) and Tunisia (-12 versus 2011), several countries from the region are still high on the ranking – U.A.E. (#7), Oman (#8), Kuwait (#12) and Saudi Arabia (#14).

While the world’s largest developing markets—particularly the BRIC nations of Brazil, Russia, India, and China—still tempt the largest global retailers and show no signs of slowing down as a source of growth, many smaller, untapped markets are providing new growth opportunities. New countries in the 2012 index include several “small gems” such as Georgia (#6), Oman (#8), Mongolia (#9) and Azerbaijan (#17) that are showing progress as attractive destinations for global retailers, particularly specialty and luxury players. These markets, though small in total retail market size, have strong fundamentals that appeal to retailers targeting a concentration of wealth and seeking to be first movers in fast-growing markets.

Michael Moriarty, an A.T. Kearney partner and the study's co-leader, commented, “Given the accelerated growth rates of developing countries compared to the anemic growth in European and North American markets, global retailers must have a strategy for expansion into developing markets. 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 in their home markets.”