|Chile No1 Destination for Emerging Market Retail|
Chile ranked first place in the 2014 A.T. Kearney Global Retail Development Index (GRDI). With Uruguay, Brazil, Peru, Panama, Colombia, Costa Rica and Mexico also in the index of top emerging economies ready for retail expansion, Latin America continues to show strength as a regional retail growth market.
Published since 2001, the GRDI ranks the top 30 developing countries for retail investment worldwide (please see chart below). The Index analyzes 25 macroeconomic and retail-specific variables that help retailers devise successful global strategies to identify emerging market investment opportunities.
With Nigeria, Botswana, and Namibia also ranking in the index, Sub-Saharan Africa is also expanding into another exciting regional retail opportunity, too.
Although there were some notable retail contractions in the past year – Walmart pruned its portfolio in China and Brazil, and Tesco took a more cautious approach to China - most global retailers are continuing their push into developing markets.
The report also found that regional retailers are becoming players in emerging markets by using their proximity as a competitive advantage to steal share in neighboring markets. Chile's Falabella and Cencosud have begun aggressive growth plans to widen their footprint across Latin America, and UAE-based LuLu Hypermarkets and Majid Al Futtaim have begun expanding in the Gulf region. South African retailers Shoprite and Woolworths have spearheaded Sub-Saharan Africa's shift to modern retail with expansion to Nigeria, Botswana, and Namibia.
The 2014 GRDI also includes a special report on the countries that have moved out of the GRDI rankings over time.
Some of these countries have matured and are no longer considered emerging markets, while others have stalled due to economic issues or political risk. The list of exits from the GRDI includes Poland and South Korea, which developed into modern retail markets; Bulgaria and Romania, where stalled economic growth delayed retail development; and Algeria and Ukraine, where social and political unrest unraveled retail growth.
The opinions expressed do not constitute investment advice and specialist advice should be sought about your specific circumstances.
Published on our website on June 26, 2014