Visual Merchandising and Store Design | VMSD.com

The new economy is forcing many retailers to look abroad for growth. In this special report, VMSD delves into the details behind some of the hottest emerging markets that should be on your radar screen.

By Anne DiNardo

If international locations used to be a nice accessory within a retailer’s store portfolio, today they’re a wardrobe staple.

As the recession continues to cut into consumer spending, pulling down retail sales and impacting the industry as a whole, the outlook on global retailing has changed. “The growth of business is not going to come from established markets,” says Hana Ben-Shabot, a partner at A.T. Kearney (New York). “The only way to grow is through other markets.”

It’s a reality many design and architecture firms are seeing, too. Randall Stone, senior partner, Lippincott (New York), says that today, when he’s working on a proposal, “clients want us to look at overseas markets before the U.S.” And not just Europe: They’re considering South America, the Middle East, North Africa and Asia-Pacific.

For the last nine years, global management consulting firm A.T. Kearney has been tracking emerging retail markets through its Global Retail Development Index (GRDI). The 2010 edition saw some interesting trends, including a handful of new markets entering the survey for the first time (Kuwait, Uruguay and Albania), Russia’s drop from 2nd to 10th on the list and China’s ascension to the top spot. We spoke with retailers, analysts and designers across the spectrum to give you a closer look at some of the more promising markets. Here’s what we learned.

Brazil

Latin America’s biggest economy, which is scheduled to host the 2014 World Cup and 2016 Olympic Games, remains a strong market. Brazil’s GDP retracted only 0.2 percent during the global recession of 2009 and is expected to grow 4.5 to 6 percent in 2010.

Bruce Barteldt, partner, Little (Charlotte, N.C.), says an emerging middle class has “created an economy of new money.” There’s also a rise in double-income homes and an emerging young consumer, promoting growth across a variety of sectors. Grocery, for instance, says Barteldt, is growing 4-to-1 over other sectors.

With much of the retail scene concentrated in four major cities – Sao Paulo, Rio de Janeiro, Brasilia and Belo Horizonte – medium to small size stores have a better chance of fitting into the ever-growing urban scene, according to Manoel Alves Lima, director, Falzoni Alves Lima, a Sao Paolo, Brazil-based firm that has partnered with Little.

But you’d better hurry, he cautions. “There’s not been a single week without a story about a new player coming to establish here.”