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While most retailers have slowed or stopped expansion in the U.S, it may be a good time to move into emerging markets according to A.T. Kearney’s eighth annual Global Retail Development Index (GRDI), which analyzes the retail investment attractiveness of thirty emerging markets.
Top five countries in 2009:
4. United Arab Emirates
5. Saudi Arabia
While retail has slowed in India like elsewhere, Wal-Mart opened there this spring and Carrefour, the French chain, plans to open in late 2009.
Russia, U.A.E. and Saudi Arabia are somewhat more surprising countries to find on this list than India and China. Mike Moriarty, a partner with A.T. Kearney who leads the firm’s North America Consumer and Retail Practice, says that Russia presents a good opportunity because the price of real estate has eased. Since Russia is a very fragmented market, acquisitions are the best way for retailers to get a foothold and now is a good time to buy since the valuations are low. “We anticipate an acquisition binge,” he says.
Both United Arab Emirates and Saudi Arabia present growth markets for retailers because they have been spared the worst of the recession thanks to their natural oil reserves. Saudi Arabia is also particularly appealing to retailers because 60 percent of its citizens, or 17 million people, are under 25 years old, a demographic that shops more than older groups.
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