SOURCE: A.T. Kearney

A.T. Kearney

June 11, 2012 09:00 ET

Brazil Tops A.T. Kearney Global Retail Development Index for the Second Year

Botswana (#20) Enters the GRDI Ranking for the First Time Signaling Regional Growth and the Future of Africa as a Significant Consumer Market; As Major Developing Countries Become More Competitive, Smaller Countries That Deliver New Growth Opportunities Rise in the Rankings -- Georgia (#6), Oman (#8), Mongolia (#9), and Azerbaijan (#17)

CHICAGO, IL--(Marketwire - Jun 11, 2012) - Today A.T. Kearney's Global Consumer Institute released the 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 pre-cursor 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).

Published since 2002, the GRDI ranks the top 30 developing countries for retail investment worldwide (see figure). The Index analyzes 25 macroeconomic and retail-specific variables to help retailers devise successful global strategies and to identify emerging market investment opportunities.

Michael Moriarty, A.T. Kearney partner and study 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, 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 their home markets."

GRDI Results
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.

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.

The Retail Talent Index
One of the key lessons learned over the 11 years of analyzing international retail expansion is the importance of finding and developing local talent to make global expansion a success. New markets are only as effective as their workforces, and harnessing the local talent pool is critical for reaching customers.

As part of this year's GRDI, we have once again executed the Retail Talent Index, an examination of the best markets for retail talent. This index ranks the top 30 countries in the GRDI based on talent availability, labor regulations, and labor costs for in-store employees. This year the analysis points to Malaysia (#1), China (#2) and Chile (#3) as the developing markets with the top retail talent.

Hana Ben-Shabat, A.T. Kearney partner and study co-leader, said, "Talent identification and development is just as important to successful market expansion as an underserved market and a growing consumer base. Wage inflation and staff turnover are significant obstacles for retailers entering many of the top developing countries."

To read the full 2012 GRDI Report, please go to www.grdi.atkearney.com.

2012 Global Retail Development Index Ranking
Country 2012 Rank 2011 Rank Change
Brazil 1 1 0
Chile 2 2 0
China 3 6 +3
Uruguay 4 3 -1
India 5 4 -1
Georgia 6 N/A N/A
United Arab Emirates 7 8 +1
Oman 8 NA NA
Mongolia 9 NA NA
Peru 10 7 -3
Malaysia 11 19 +8
Kuwait 12 5 -7
Turkey 13 9 -4
Saudi Arabia 14 10 -4
Sri Lanka 15 21 +6
Indonesia 16 15 -1
Azerbaijan 17 N/A N/A
Jordan 18 N/A N/A
Kazakhstan 19 14 -5
Botswana 20 N/A N/A
Macedonia 21 29 +8
Lebanon 22 12 -10
Colombia 23 24 +1
Panama 24 26 +2
Albania 25 13 -12
Russia 26 11 -15
Morocco 27 20 -7
Mexico 28 22 -6
Philippines 29 16 -13
Tunisia 30 18 -12

About A.T. Kearney
A.T. Kearney is a global team of forward-thinking, collaborative partners that delivers immediate, meaningful results and long-term transformative advantage to clients. Since 1926, we have been trusted advisors on CEO-agenda issues to the world's leading organizations across all major industries and sectors. A.T. Kearney's offices are located in major business centers in 39 countries.

About the A.T. Kearney Global Consumer Institute
The A.T. Kearney Global Consumer Institute is a worldwide network of professionals and executives. The Institute combines proprietary and public data resources with local knowledge to deliver strategic and operational insights to executives in consumer-facing industries seeking long-term growth and competitive advantage. For more information, please contact gci@atkearney.com.

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