AFRICA— A.T. Kearney’s Global Retail Development Index (GRDI)reveals that economic development and trade policy remain the largest factors in shaping retail growth in consumer markets.
While social media and e-commerce fuel the evolution of global consumers, national, regional and local realities, such as internet connectivity and the availability and cost of labour, continue to shape retail development globally, the GRDI noted.
The 2019 GRDI ranks 30 developing countries on a scale of zero to 100, selected from a list of 200 nations based on three criteria.
These criteria include achieving a “Country Risk” score above 35; having a population of at least five million and enjoying a per capita GDP of more than US$3,000.
A key theme in this year’s findings is the “Arrival of the Middle East and Africa” – 10 of the top 30 countries fall into this bucket, suggesting that emerging economies are maturing, and the next wave of retail development and growth will certainly be in the broader region.
“Driven by government-led economic reforms, a large & digitally connected youth consumer segment, and growing purchasing power, economies in the region have made significant gains in our rankings and have caught the attention of leading retailers,” AT Kerney said in a statement.
AT Kerney notes that Africa has shown considerable growth and improvement, with seven African countries now ranked in top 30 in the Index.
Apart from Ghana, which is now ranked in 4th place for the first time on the index, other notable countries include; Senegal, Morocco, Tunisia, Egypt, Tanzania and Nigeria.
Ghana is Africa’s new “bright spot” driven by increased foreign & public investment as well as urbanization of the population.
In Ghana, department stores/shopping store space is set to grow by 15% per year and many international retailers are taking notice.
Nigeria’s ranking in the global retail development index dropped three steps downward from the 27th position recorded in 2017 to 30th position in 2019.
Senegal, which also appeared in the index for the first time, ranked 6th while Morocco, like Nigeria, dropped five places to 12th position.
The report also noted that Egypt has seen retail sector growth of 25% between 2017-18 on the back of economic and fiscal reforms.
In addition to local retailers investing in-country, many regional and international retailers are investing in both brick-and-mortar and digital across these markets.
The study also revealed that South African retailers Pick ‘n Pay and Massmart Holdings are expanding into African retail markets, particularly Ghana.
Many regional and international retailers are already aggressively entering the market and transforming the landscape from traditional to modern trade.
The GRDI is a very important tool especially to Retailers, consumer goods manufacturers, and international service providers rely on it as the definitive source for understanding which economies are growing, stagnant or declining, and why.