Brazil is top developing economy for retail expansion

New York -- A report released Monday by A.T. Kearney showed that Brazil once again first among developing countries for global retail expansion.

A.T. Kearney’s Global Consumer Institute’s 2012 Global Retail Development Index ranks the top 30 developing countries for global retail expansion.

Brazil, which topped the list for the second year in a row, was followed by Chile, China, Uraguay and India. Botswana (#20) entered the GRDI ranking for the first time, signaling regional growth and the future of Africa as a significant consumer market. And, as major developing countries become more competitive, smaller countries that deliver new growth opportunities are rising in the rankings – Georgia (#6), Oman (#8), Mongolia (#9), and Azerbaijan (#17).

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).

“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,” said Michael Moriarty, A.T. Kearney partner and study co-leader. “In the past five years, U.S.-based Wal-Mart, France-based Carrefour, U.K.-based Tesco and Germany-based Metro Group saw their revenues in developing countries grow 2.5 times faster than in their home markets.”

Latin America’s expanding, dynamic retail sector and strong economic growth has driven strong results with seven countries included in the GRDI this year. Many retailers have entered Latin America in the last few years.

Retail sales per capita in Brazil (#1 in the Index) have grown 12% per year for the past four years to reach $5,514, the third largest of the countries ranked in the GRDI. The retail market size increased 15% last year, and consumer spending has increased by 9% per year since 2007. In 2011, retail sales accounted for 70% of Brazil’s consumer spending.

India (5th) remains a high-potential market with accelerated retail market growth of 15% to 20% expected over the next five years, supported by GDP growth of 6 to 7%, rising disposable income and rapid urbanization.
 

Recommended stories

Login or Register to post a comment.