The Global Retail Development Index™ is an annual study that ranks the top 30 developing countries for retail expansion worldwide. The Index analyzes 25 macroeconomic and retail-specific variables to help retailers devise successful global strategies and to identify emerging market investment opportunities. The GRDI is unique because it identifies today's most successful markets and those that offer the most potential for the future.
Global Retailers: Cautiously Aggressive or Aggressively Cautious?2013 Global Retail Development Index™
A.T. Kearney’s Global Retail Development IndexTM (GRDI) has guided global retailers with their strategic investments for more than a dozen years, and the 2013 Index reflects some important changes to the retail environment. But one thing hasn't changed: As developed markets face flat or anemic growth, developing markets remain important sources of growth. The 12th annual edition of the GRDI finds many opportunities for retailers seeking to grow and expand in fast-growing developing markets big and small.
Of course, there's nothing easy about a global expansion strategy in retail. Every market has unique challenges that require unique strategies for success. And this year’s GRDI finds several examples of countries where global retailers are taking a step back from the aggressive expansion of the not-too-distant past in favor of more cautious strategies. For example, as retailers confront challenges in China, many are scaling back plans for new stores and choosing sites more carefully. In some regions, such as Latin America and Central Asia, more retailers are opening in smaller countries to hone their regional strategies before entering larger markets.
Highlights of the 2013 GRDI include:
- Brazil takes the top spot for the third straight year, followed by two other Latin American countries, Chile and Uruguay. A strong and growing middle class, controlled inflation, sustained economic growth, and continued economic and political stability have increased consumer and investor confidence and created a favorable environment for retail development.
- China dips to fourth but it remains a retail powerhouse thanks to double-digit sales growth and rising consumer demand. However, many luxury retailers are rethinking their expansion plans as Chinese consumers purchase more goods abroad. China is first in the Retail Apparel Index.
- Once again, the Index sees the rise of “little gems”—small-population countries with unique characteristics. This year’s gems include Uruguay (3rd in the rankings), Mongolia (7th), Georgia (8th), and Armenia (10th), among others. For luxury retailers, these are newfound hubs. For general retailers, they can be the beginning of a regional strategy.
- India has its lowest ranking in the GRDI’s 12 years, amid high operating costs, low bargaining power with vendors, and heavy discounting to improve sales. However, the long-term fundamentals remain strong: a large, young, and increasingly brand- and fashion-conscious population.
About the Index
Published since 2002, the GRDI helps retailers prioritize their global development strategies by ranking the retail expansion attractiveness of emerging countries based on a set of 25 variables including economic and political risk, retail market attractiveness, retail saturation levels, and modern retailing sales area and sales growth. The GRDI focuses on opportunities for mass merchant and food retailers, which are typically the bellwether for modern retailing concepts in a country.
- Food Processing, 6 August 2013
A.T. Kearney examines the changing consumer perceptions from frozen to fresh food and the declining future of the frozen prepared food category.
- 17 June 2013
China once again leads the A.T. Kearney Retail Apparel Index. The Apparel Index also includes a number of countries from Latin America and the Middle East showing that these regions continue to offer compelling opportunities.
South America Tops A.T. Kearney Global Retail Development Index—Brazil (#1), Chile (#2), and Uruguay (#3)12 June 2013
Today A.T. Kearney’s Global Consumer Institute released the 2013 Global Retail Development Index (GRDI), a ranking of the top 30 developing countries for global retail expansion. Brazil is ranked number one for the second consecutive year, thanks to its growing middle class economy, high consumption rates, large, urban population, and reduced political and financial risk.
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, many smaller, untapped markets are providing new profit frontiers, particularly for regional and specialty players.
The 2012 A.T. Kearney Global Retail Development Index, the 11th annual edition, finds a wide array of possibilities for retailers seeking to capture an immediate impact and a growth advantage in developing countries. Global retail expansion today has a different profile than it had a decade ago when we published findings from the first Index. 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, many smaller, untapped markets are providing new profit frontiers, particularly for regional and specialty players.
Highlights of the 2012 GRDI include:
- Brazil is the top country in the GRDI for the second straight year, leading the way for Latin America, which has 7 countries among the top 30. Chile is second once again, and Uruguay is fourth.
- China climbs to third place in the GRDI, as double-digit sales growth is expected. However, rents and labor costs are rising, so the market still has many challenges.
- Some of the smaller countries with attractive retail markets include Georgia, Oman, and Mongolia, all of which were unranked in the 2011 GRDI but are in the top 10 this year.
- With retail talent a critical differentiator in developing markets, finding and retaining talented workers is a core component to success. The Retail Talent Index, reintroduced this year, is led by Malaysia, whose low-cost labor and favorable regulations, and a well-educated population support the operations of international retailers that enter and expand in the market.
About the Index
Published since 2002, the GRDI helps retailers prioritize their global development strategies by ranking the retail expansion attractiveness of emerging countries based on a set of 25 variables including economic and political risk, retail market attractiveness, retail saturation levels, and modern retailing sales area and sales growth. The GRDI focuses on opportunities for mass merchant and food retailers, which are typically the bellwether for modern retailing concepts in a country.Close
This GRDI 10th anniversary report looks back at the lessons from a decade of change for global retail development.
By almost any measure, the retail landscape in developing markets has experienced explosive growth over the past 10 years. As the population in these countries increased by 11 percent, retail space expanded by 225 percent, retail sales per capita increased almost 100 percent, and Internet access grew more than 400 percent. Developing countries now represent 42 percent of global retail sales, a 7 percent rise since 2001. As mature economies stagnate, developing markets are a global retail growth engine.
However, getting it right in developing countries is difficult, and there have been plenty of costly stumbles along the way. This paper, which accompanies the main report of the 2011 GRDI, looks at the ups and downs of the past decade, the countries and companies that have stood out in an era of globalization, and the most important lessons international retailers have learned as they tapped into developing markets.
Bloomberg TV, 28 June 2013
Mike Moriarty, A.T. Kearney partner, discusses global retailing in “The Next Big Trade” on Bloomberg Television’s “Street Smart.”
Mike Moriarty, A.T. Kearney partner, discusses hot spots in the world for investing in retail, noting the 2013 activity in South America.
Europe, Middle East, and Africa