Africa offers greatest growth opportunity for UK retailers – Barclays

2nd April 2013

By: Natalie Greve

Creamer Media Contributing Editor Online

  

Font size: - +

A recent survey by global financial services provider Barclays has shown that, while the US and China remained favoured investment destinations for UK retailers, the majority believed that the African continent would offer the greatest retail growth opportunity in the next decade.

“Many of the trends that have driven the economic development of emerging economies in Asia and South America are beginning to take hold in Africa.

“The continent’s rapidly expanding middle class increasingly need goods and services, which cannot be catered for domestically, providing a golden opportunity for internationally-minded retailers,” explained Barclays retail and wholesale head Richard Lowe.

“This truly is a ‘ground floor’ moment in many African economies.”

Barclays stated that, while Africa remained one of the final frontiers for retail, Walmart’s recent acquisition of South Africa’s Massmart indicated increasing global retailer interest in the continent.

Nearly one-quarter of retailers surveyed believed that Africa would be the fastest-growing retail market in the next ten years, with first-mover advantage the most important consideration when expanding. 

Despite the positive African market sentiment, only 21% of those retailers surveyed currently generated sales on the continent.

Of these, 53% indicated that South Africa was their primary market, while other major markets currently providing revenues for UK retailers included Chad, the Congo, Morocco and Nigeria.

The majority of retailers indicated that any expansion efforts would focus on the markets of South Africa, Ghana and Kenya, as these States offered the most rapidly developing middle class and an increasing uptake of mobile technology.

While Africa offered the best longer term investment potential, 46% of UK retailers surveyed considered the US their current investment destination of choice, despite its reputation as the hardest market in which to achieve commercial success.

China was considered the second most popular destination currently.

“On the surface, the US would appear to be an easy market in which to secure a foothold, but its sheer scale means achieving commercial success across the whole country is an incredible feat. As for China, nothing is impossible but everything is difficult,” added Lowe.

Asked about future expansion elsewhere, nearly one-quarter, or 23% of retailers said Germany was their number one choice for overseas expansion in the next five years, closely followed by China and Australia.

Lowe added that, while it would be unreasonable to state that there was no further growth in UK domestic markets, it was becoming increasingly difficult to extract value in the current climate.

“The economic realities across the Western world mean that retailers now have international expansion firmly on their radar,” he said.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

Comments

The content you are trying to access is only available to subscribers.

If you are already a subscriber, you can Login Here.

If you are not a subscriber, you can subscribe now, by selecting one of the below options.

For more information or assistance, please contact us at subscriptions@creamermedia.co.za.

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION