May 10/16NEWS

Volatility ahead – Economic trends impacting retail in 2016

The global economy continues to be shaped by moderate growth rates and volatility, both of which impact shoppers, retailers and brand owners on a number of levels.

Volatility is an apt description of the current state of the economy, as it implies uncertainty within a predictable framework – certainty of volatility, and certainty of change. Change initiated by unpredictable market conditions, new technologies, constantly connected shoppers and no single geographical region offering stable growth for some years to come.

5 things you need to know

  1. Volatility in the global financial and commodity markets will trigger changes in the economy for consumers, retailers and suppliers.
  2. Demographic change in industrialised nations is putting pressure on incomes, driving middle class erosion and shrinking market shares of big box grocery outlets – creating a threat to FMCG suppliers.
  3. Slow recovery in the US and Europe will put breaks on internationalisation of global retail giants. FMCG brands should not lose time and rather look at opportunities with local players to grow in emerging markets.
  4. The current challenges across the BRICS markets are the result of both political decisions and global market conditions, as well as cyclical bumps on the road to structural change. The long-term outlook remains strong.
  5. While no region in the world is likely to provide continuous growth over any extended period of time, there are plenty of opportunities for flexible organisations. Emerging markets megacities now provide the biggest opportunity worldwide for FMCG.

References: Planet Retail – Top 5 Economic Trends to Impact Retail in 2016.