Fig: Region-wise growth rate Global Retail Sales

Interestingly, there is a negative correlation between overall market size and the average annual growth rate. This means that the regions with high revenue contribution are low in growth (US, Western Europe & Japan) whereas the regions which are low in contribution to global sales are experiencing a high growth rate (Africa/Middle East, Latin America, Asia/Pacific). The reasons for this change are:

• The changing economic conditions and a tougher operating environment in the mature and saturated developed markets is forcing retailers to move to newer avenues
• Despite the setbacks in the US and Europe, GDP growth across India, China and Russia is still expected to top 8 percent in 2008. This makes the retail opportunity in these emerging economies more compelling (less than 10 percent of these markets are well-organized).
• Operating in emerging markets create a powerful incentive for large retailers to further diversify their customer and operations bases, deliver continued growth, reduce risk, realise economies of scale and building a global brand name.