Consumer spending in the UK is set to be stunted by slow economic growth but most retailers predict expansion into emerging markets can offset this trend, according to a new study.
Research group the Economist Intelligence Unit (EIU) surveyed 900 consumer goods and retail professionals recently, and found 71 per cent thought slow global growth was the biggest challenge of 2012.
Almost three-quarters of those asked thought that emerging markets will take up the slack of stalling rich nations in terms of retailing next year however, and two-thirds will be directing their ambitions in these countries.
Jon Copestake, Lead Analyst for Consumer Goods at EIU, said: “Fears seem to lie mainly in the ailing eurozone, which just under half of the panel thinks will exist in its current state by 2013. There is scope for optimism, however.
“One in five respondents see conditions for their company improving, while almost half think things will stay the same. Additionally, only one-third predict that things will get worse for the industry as a whole in 2012.
“The consumer goods and retail sectors are certainly expected to outperform the global economy, which 62 per cent see as worsening.”
China will be a major expansion target for quality British brands next year it seems, with the World Luxury Association predicting that the Asian giant will overtake its neighbour to be the world’s largest luxury goods market in 2012 to total $14.6 billion (£9.3 billion).
Worries abound however that the crisis seen in the EU could have a serious knock-on effect on the rest of the world, and two-thirds of EIU’s respondents think the growth in luxury goods will be hampered if China’s economy undershoots.
Technological innovation was seen as another cause for optimism next year by the majority of those surveyed, with 61 per cent anticipating that 2012 will see mobile commerce become a retail channel in its own right, however almost half have no plans to focus more on social networks.
Copestake continued: “Emerging markets will not be the only story in 2012. The year will bring plenty of other opportunities through innovation and evolving retail channels.
“Apple is expected to launch its much anticipated iPhone 5 and iPad 3. However, it faces being overtaken by Android app downloads and non-iPad tablets. This highlights how mobile devices will be a focal point, and not just at the top end of the market.
“The recent launch of the Aakash in India, with a price tag of just US$60, shows that tablets will become more affordable. Meanwhile, increasing uptake could push global mobile phone penetration beyond 100 per cent by the end of 2012.”