Consumergoodsandretailoutlook2024HigherfootfallamiddepletedsavingsIntelligencethatmovesyouforwardEIUistheresearchandanalysisdivisionofTheEconomistGroup,aleadingsourceofinternationalbusinessandworlda?airsinformation.Itprovidesaccurateandimpartialintelligenceforcorporations,governments,?nancialinstitutionsandacademicorganisations,inspiringbusinessleaderstoidentifyopportunitiesandmanageriskswithcon?dencesince1946.EIU’sproductsincludeaCountryAnalysisservice,providingcomprehensivepoliticalandeconomicanalysisandforecastsfornearly200countries,andaportfolioofsubscription-baseddataandforecastingsolutions.Wespecialisein:Countryanalysis—accessdetailedcountry-speci?ceconomicandpoliticalanalysis,dataandforecasts,aswellasassessmentsofthebusinessenvironmentindi?erentmarkets.Riskanalysis—identifyoperationaland?nancialthreatsaroundtheworldandunderstandtheimplicationsforyourbusiness.Industryanalysis—gaininsightintokeymarkettrendswith?ve-yearforecastsandin-depthanalysisforsixindustriesin70majoreconomies.Custombrie?ngsandpresentations—informyourstrategy,developexecutiveknowledgeandengageaudiences.Ourteamisavailabletobookforboardroombrie?ngs,conferencesandotherprofessionalevents.ContactusformoreinformationTo?ndoutmoreaboutoursolutionsandthedi?erentwayswecanhelpyou,pleasegetintouchorvisit.LONDONDLFCyberCity,Phase–IIIGurugram–122002Haryana,IndiaTel:+911246409486e-mail:asia@DUBAIEconomistIntelligenceTheAdelphi1-11JohnAdamStreet,London,WC2N6HTEconomistIntelligencePOBoxNo-450056,O?ceNo-1301AAuroraTowerDubaiMediaCityDubai,UnitedArabEmiratesNEWYORKUnitedKingdomTel:+97144463147Tel:+44(0)2075768000e-mail:london@e-mail:mea@EconomistIntelligence900ThirdAvenue16thFloorHONGKONGGURUGRAMNewYork,NY10022UnitedStatesTel:+12125410500e-mail:americas@EconomistIntelligenceEconomistIntelligenceTEGIndiaPvtLtd1301CityplazaFour12TaikooWanRoadTaikooShing,HongKongTel:+85225853888SkootrSpaces,UnitNo.1,12thFloor,TowerB,BuildingNo.9e-mail:asia@CONSUMERGOODS&RETAILOUTLOOK2024HIGHERFOOTFALLAMIDDEPLETEDSAVINGSHigherfootfallamiddepletedsavingsAslowdowninin?ationwillbolsterretailvolumegrowth,butdepletedsavingsandhighfoodpriceswillactasdampeners.?Retailsaleswillgrowby6.7%inUS-dollartermsand2%involumetermsin2024,helpedbyaslowdowninin?ation.Buthouseholdshavedepletedmuchoftheirsavings,sotheywillremainhighlyprice-sensitive.??Expansionindevelopingmarketswillleadtodouble-digitgrowthinglobalonlinesalesin2024.However,onlineretailers’pro?tswillremainunderpressureasregulatorywoeschallengethesector.Consumers’preferenceforshoppingatbrick-and-mortarstoreswillbolstero?ineretailers,especiallydiscountretailers.Somewillexpandtheirfootprintacrossgeographiestoaccommodatethehighfootfallexpectedin2024.?Foodin?ationwillremainaconcerninmanydevelopingeconomies.TheElNi?oclimatepatternislikelytopushupricepricesindevelopingAsia.Thiswilldampendiscretionaryspendingatatimewhenbrandsarelookingtotheregiontoo?setslowdownsinmaturemarkets.Awelcomeslowdowninin?ationwillcomehandinhandwithadepletioninhouseholdsavings,posingnewchallengesforretailersandconsumergoodsmanufacturers.Globally,realgrowthinretailvolumeswillriseto2%in2024.Onlineretail,whichhasoftenbeenthedrivingforceforretailgrowthsincethepandemic,willcontinuetogrow,accountingfor14.6%oftotalglobalretailsales,butchallengeswillabound.Onlinesalesgrowthwillaccelerate,butpro?tsandjobswillfacemorechallengesSince2022spirallingin?ationinNorthAmericaandEuropehasbeenbadnewsforonlineretailers,marketsGrowthinonlineretailwillslowinwealthy(US$valuegrowth,%yearonyear)asconsumerscutdownonspendingorwentbacktostorestohuntforbargains.In2024globalgrowthinonlinesalesinUS-dollartermswillreturntodoubledigits(10.5%)afteracontractionin2022and7%growthin2023.InEuropethisaccelerationwillmainlyre?ectaslightrevivaloftheeuroagainstthedollar,butinAsia,theMiddleEastandAfrica,andSouthAmericathelowerpenetrationoforganisedretailwillalsocreategrowthopportunities.Incontrast,growthinonlineretailintheUS(andinmuchofWesternEurope)willbeinsingledigits.SouthAmericaAsiaMiddleEast&AfricaUSMCAEurope3020100-10-202021222324Sources:EdgebyAscential;EIU.1?TheEconomistIntelligenceUnitLimited2023CONSUMERGOODS&RETAILOUTLOOK2024HIGHERFOOTFALLAMIDDEPLETEDSAVINGSDespiteanimprovedoutlookin2024,wedonothaveasunnyoutlookforonlineretail.Weexpecttoseecontinuedpro?tabilitypressures,marketconsolidationandregulatoryroadblocks.Highinterestratesacrossmuchoftheworldwillmakeitdi?culttoattractnewinvestment,andexistinginvestorswilldemandbetterreturns.Indevelopingmarkets,whereconsumersarehighlyprice-sensitive,onlineretailingisoften(atleastinitially)loss-making.Pro?tandregulatorywoeswillshrinkthenumberofpureplay(onlineonly)retailers,whichinturnwillalsohaveanimpactongigworkersemployedbythesebusinessesandpotentiallyposeriskstoretailanddeliveryjobsin2024.Onlinegrocerydelivery,whichsawthefastestgrowthduringthepandemic,islikelytobebadlya?ectedin2024.SeveralplayersacrossEurope,suchasDeliverooandGetir,havebeenexitingmarketsandlayingo?employeesamidrisingfoodcosts.Lastbutnotleast,theonlineretailsectorwillseemoreregulatorypressures,fromscrutinyofanti-competitivepracticestobansondarkstoresthatraisecity-planningchallenges.O?ineretailexpansionwillpickuppaceWeforecastthatglobalretailsaleswillgrowby6.7%indollartermsin2024,withbrick-and-mortarstoresaccountingforover85%oftotalsales.2024willseethestrongestpaceofgrowthforo?ineretailsincethepost-pandemicreboundof2021.Thisrecoverywillbedrivenpartlybythereturnofinternationaltourismbutlargelybythecost-of-livingsqueeze.Eventhoughin?ationwilleasein2024,asearchforlowerprices,anunwillingnesstopaydeliveryfeesandtheprioritisationofbasicgoodssuchasfoodwillluremanybargain-huntingconsumersbacktostores.Recoveryinfootfallatstoreswillencouragemanyretailerstoexpandtheirphysicalfootprintin2024(evenasmanysmallbusinessesaroundtheworldshutdownamidprohibitivelyhighcostsandinterestrates).TheseexpansionplanswillnotbelimitedtodevelopingmarketsinAsiaandtheMiddleEast,whereWesternbrandswillsetupshopstoo?setsluggishgrowthathome.Brick-and-mortarexpansionsarealsoonthecardsforretailersinEuropeandtheUS.Aldi,aGermandiscountgrocer,willcompletetheacquisitionof400newgrocerystoresinthesouth-easternUS.Costco,abiggerrivalintheUS,willalsoopenthe?rstofitsplanned30newSam’sClub(big-boxstores)storesnextyear.Eveninin?ation-ravagedEurope,supermarketchainsCarrefour(France)andColruytBelgiumhaveannouncedplanstoacquirenewstoresinSpainandBelgium,respectively,in2024.Newstoreopeningswillnotbelimitedtothegrocerysector—evenfashionretailerslikeNordstrom(US)andPrimark(Ireland)willopennewstoresintheUSnextyear.Althoughvacancyratesforretailrealestateremainhighinmanymarketsaroundtheworld,theyhavestartedtodeclinein2023andshouldfallfurtherin2024.Foodin?ationconcernswillnotbebehindusFoodandbeveragecommoditypriceswillcontinuetodeclinein2024,butthiswillnottranslateintomuchreliefforconsumers.Oneofthemainreasonsforthisislabourcosts,whichcontinuetoriseacrossretailandwarehousingjobs.Moreover,withfoodpricesstillhigherthanin2021,manygovernmentswillstepintoprotectconsumers.Italyhasalreadynegotiatedwithfoodmakersandretailerstoholddownthepricesofstaplefoods,whileFrance’se?ortstobringforwardannualpricenegotiationsareexpectedtobearfruitinearly2024.Weexpectconsiderableregionaldisparitiesinpricetrends.Unlikein2022-23,in?ationaryheadwinds2?TheEconomistIntelligenceUnitLimited2023CONSUMERGOODS&RETAILOUTLOOK2024HIGHERFOOTFALLAMIDDEPLETEDSAVINGSwillgrowstrongerindevelopingandemergingmarketsin2024asElNi?oa?ectsproductionofrice,co?eeandcocoa.Theoutlookisparticularlyconcerningforsouthernandsouth-easternAsia,whichaccountfor90%oftheworld’sriceconsumption.Theregion’shouseholdsalsoallocateahighshareoftheirconsumerspendingtofoodandbeverages—from31%inIndiaand32%inIndonesiato42%inthePhilippines.Thiswillmakethemveryvulnerabletofoodpricerises.ThisinturnwilldampendiscretionaryspendingbyAsianconsumersatatimewhenmanybrandsarelookingtothisregiontocompensateforslowdownsinEuropeandtheUS.Asianconsumerswillfacemorefoodpriceincreases(consumerspendingonfood,drinks&tobacco,US$m;2020=100)IndiaPhilippinesIndonesiaThailandMalaysiaVietnam16015014013012011010090202021222324Source:EIU.WhattowatchScrutinyofsupplychains.Bytheendof2024theEU’sdeforestationregulationwillprohibittheimportationofgoodslinkedtolanddeforestedafterDecember31st2020.Thebiggestimpactwillbefeltindevelopingcountriesthatspecialiseinsellingproductssuchaspalmoil,co?eeorcocoatotheEU.Whereasthelargestconsumergoodscompanies,suchasNestle(Switzerland),havebettervisibilityoftheirsupplychains,aswellasloftytargetstoensureusageofdeforestation-freematerials,mostsmallbusinesseswillstruggletomeettheserequirements.Thetechnologicalinvestment(suchasintheblockchain)neededtobettermonitorsupplychainswillpushupcostsforEUbusinessesandconsumers.MoreBrexitpains.TheUKgovernmentwillintroducepost-BrexitbordercontrolsonfreshfoodproductsfromtheEUinJanuary2024.Themovehasbeendelayedseveraltimes,whileUKexportstotheEUalreadyfacebordercontrols.Thenewimportcontrolswouldaddtocostsforthefoodindustry,whichwouldultimatelybepassedontoconsumers,potentiallyo?settingsomeofthegainsmadeincontrollingin?ationin2023.Plasticpurge.About175countries,aspartofaUNintergovernmentalpanel,areaimingtoagreeonglobalstandardsforcurtailingplasticspollutionbytheendof2024.Thetaskisdi?cult,especiallyamiddi?erencesamongthecountrymembers,butitisanimportantsteptowardsresolvingtheplasticsproblem.Currentregulationsonplasticwastecontrolarefragmented,leadingtounevenprogressonwastecontrol.Severalcountrieswillalsoclampdownonplasticsusagethroughnationalregulations—forexample,Germanywillimposealevyonuseofsingle-useplasticsstarting2024.EIU'sweatherforecastforretailandconsumerbusinessesin2024O?ineretailOnlineretailFoodNon-foodSource:EIU.3?TheEconomistIntelligenceUnitLimited2023EIUViewpoint:CountryAnalysisPreparingyouforwhat’saheadUnderstandacountry’spolitical,policyandeconomicoutlookwithouraward-winningforecasts,analysisanddata.Ourexpertsassesstheglobaldynamicsthatimpactorganisations,soyoucanplanandoperatee?ectively.What’sincluded????????????Globalandregionaloutlookspanningpolitics,economicsandmarket-movingtopicsDailyinsightsonthedevelopmentsthatimpactthefutureoutlookExecutivesummariesofcountryforecastsoverthemedium-termoutlookMedium-termcountryforecastson~200countries’politicalandeconomiclandscapeLong-termcountryforecastsonthestructuraltrendsshaping~80majoreconomiesIndustryanalysisontheoutlookfor26sectorsin~70marketsCommodityforecastsonsupply,demandandpricesof25criticalgoodsMacroeconomicdataonforecasts,aswellashistorictrendsIndustrydataondemandandsupplyofkeygoods,nowandinthefutureProprietaryratingsonthebusinessenvironmentThematicanalysisofthecross-cuttingissuesthatourexpertsexpecttoshapetheglobaloutlookHowCountryAnalysishelpsyoutostayaheadExpansivecoverage-global,regionalandcountry-l