Australia ‘target destination’ for global retailers
Australia’s rank was lifted by strong market demand and factors such as business environment and ease of operating, while a comparatively poor economic environment ranking held it back overall. In addition, Australia was ranked in the top 20 locations for the quality of overall infrastructure, and placed 5th for ease of doing business.
“Australia is seen as a target destination predominantly due to the strong market demand, good business environment and our logistics performance. We are also seeing more foreign investment in Australia with favourable exchange rates and the comparative ease of operating in this region,” said Anthony Venturini, sector MD at Hyder Consulting, part of the Arcadis Group.
Hong Kong and Singapore occupy the top positions, while ongoing economic uncertainty in the Eurozone is holding many European nations back. A list of the most favourable and least favourable markets for retailers to operate in is listed below.
The index ranks 50 international markets according to the five key factors that retailers look to when choosing where to locate their stores; these include infrastructure quality, consumer demand and ease of establishing a business in the first instance. Overall, the mature Asian markets offer retailers the best conditions with Hong Kong, Singapore and Japan occupying three of the top five positions, places that reflect their burgeoning middle class and governmental willingness to encourage foreign investment. Furthermore, in environments such as these retailers are able to turn around struggling sales with greater ease, creating a more stable base for investment.
The UK and US performed strongly, providing retailers with a favourable regulatory environment and strong economic climate, despite their ageing infrastructure which has the potential to impact future prospects. Meanwhile, of the Eurozone nations only Germany and the Netherlands feature in the top ten. Ongoing uncertainty over the euro may be continuing to impact retailers’ operations right across the continent and could potentially dissuade investment in the longer term.
“For retailers with international aspirations, weighing up where, how and when to expand into a new region, country or city is critical if they are to stay ahead of the competition and meet their business objectives,” said Matt Fletcher, global head of retail at Arcadis. “On a global level, it is the Asian markets of Hong Kong and Singapore that are the stand-out places for retailers due, above all, to the quality of their transport infrastructure, ease of doing business and fewer restrictions on trade. However, increasing operating overheads such as high property costs and softening sales are currently having an impact on financial performance.”
The most favourable markets for retailers
- Hong Kong
- United Kingdom
- United Arab Emirates
The ten least favourable markets for retailers to operate