Brazil has become the top-ranked developing market for retail expansion, according to consultants at A.T. Kearney.
The firm said today (6 June) that Brazil jumped from fifth last year on its Global Retail Development Index (GRDI). Brazil’s rise came as India and China slipped in the list.
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The GDRI ranking mirrors the “dramatic changes” that have taken place in global markets, and the varying impacts they have had on different emerging economies, said A.T. Kearney.
It found that South American countries have fared well during the recession, posting “an impressive” 6% GDP growth in 2010.
“Brazil is an attractive target expansion market given expected GDP growth of 5% per year over the next five years, a large and highly urban population, and surging retail sales,” said A.T. Kearney partner and study co-leader Michael Moriarty.
“In addition to the substantial investment in infrastructure the Brazilian government is planning, inflows of foreign capital are rising dramatically as well.”
Uruguay, meanwhile, rose up the rankings to second from eighth in last year’s GRDI. A.T. Kearney said it is “riding Brazilian coat tails” and experienced GDP growth of 8.5% in 2010.
“The country’s limited scale combined with positive macro-economic conditions makes it an interesting choice for retailers looking to expand into more contained markets,” said the consulting firm.
Chile rose to number three in the ranking after a “strong” recovery from the 2009 recession. The country’s government created incentives to stimulate retail consumption, A.T. Kearney and, as a consequence, Chile’s GDP grew 5.2% in 2010 and is expected to grow another 6.1% in 2011.
India was fourth, down from third last year. Kuwait, second in the previous year’s poll, ranked fifth. China, which topped last year’s list, was sixth.
