Slow growth, heavy discounting and more fickle shoppers in recession-weary developed markets mean retailers should be increasingly focused on international expansion, according to the ninth annual Global Retail Development Index (GRDI) study from management consulting firm AT Kearney. 
“Retail executives have learned again that core markets like the United States and Europe are not the powerful engines of growth they would like,” said Hana Ben-Shabat, AT Kearney partner and co-leader of the study.
“Reliance on developing countries for future growth is no longer a ‘nice-to-have’, but a necessity. Establishing operations in a portfolio of countries both small and large offers the best path to global success for retailers.” 
While many retailers are focused on expansion to larger emerging markets like Brazil, India and China, the GRDI found smaller countries including Kuwait, Uruguay, Albania and Macedonia represent increasingly attractive expansion opportunities.
Some of these countries represent good opportunities for retailers to establish regional beach heads (Macedonia, Guatemala), serve as test markets because of their similarities to other countries in the region (Uruguay) or benefit from heavily urbanized and wealthy populations (Kuwait).
The story for Australian retailers looking to expand is very similar, according to Irvinder Goodhew, principal with AT Kearney’s Sydney office.
“The danger for retailers comes when companies stick to the same strategy that worked in Australia when looking to expand overseas,” she said.
“Companies need to be prepared to localise and adapt to the local market – that doesn’t just happen overnight. It takes patience to create a strategy that will work in a different market.”
The top 10 countries in the 2010 GRDI are the most diverse mix of large and small markets in the Index’s nine-year history: China, Kuwait, India, Saudi Arabia, Brazil, Chile, United Arab Emirates, Uruguay, Peru and Russia.
“Australian retailers should take a close look at the results, as they begin to look for more international growth opportunities to satisfy shareholders,” said Goodhew.
Published since 2002, the GRDI helps retailers prioritise 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 the difference between gross domestic product growth and retail growth.
A detailed analysis and country-specific results for the 2010 GRDI are available at