India continues to be an attractive Retail destination

Some foreign retailers may be calling it quits but India is still ‘red-hot’ when it comes to attractiveness as a retail market. India has reclaimed the top position amongst 30 nations in the results of the 8th Annual Global Retail Development Index (GRDI) revealed on Monday by global consulting firm A T Kearney. Low inflation and rent reductions in smaller cities helped push India’s score (68) above Russia (60), China (56), UAE (56), Saudi Arabia (56), the study shows. For the fourth time in five years, India has been ranked the most attractive for retail investment as global retailers including Wal-Mart, Carrefour and Tesco continue to expand in the country. The GRDI helps retailers prioritise their global development strategies by ranking the retail expansion attractiveness of emerging countries on a set of 25 variables including economic and political risk, retail market attractiveness and the difference between GDP growth and retail growth. In 2008, Vietnam toppled India to become the most attractive retail market but tables changed as recession swept through continents. AT Kearney now believes that ‘larger and resilient developing countries’ such as India are most likely to lead the economic recovery. With declining sales in home markets and consumer spending still tight, global expansion increases in importance as a strategy for growth. The global recession has made prime real estate locations increasingly available and affordable in many developing markets. It also has made acquisition valuations of many local-market retailers very attractive, says A T Kearney. In India, slower retail sales are causing Indian retailers to delay expansion plans and restructure their operations. But this has opened the window of opportunity for global retailers and many, including Wal-Mart, are continuing expansion plans as Indian consumers grow increasingly affluent, brandconscious and familiar with global retail formats.