With many retailers considering the UK to be a 'mature market' so the retail-grass can appear greener elsewhere. 2008 will see UK retailers opening more stores outside the UK. And, in the same perceptual mindset we will see some new retailers, from their own 'mature markets' outside the UK, opening stores in UK.
Central Europe and China are likely to continue to attract investments together with pioneering interest into Eastern Europe and Russia. India is the big attraction but is unlikely to be a realistic destination in 2008 because of entrenched governmental constraints. For retailers with a substantial presence in the East Asian and Central European growth markets, major expansion opportunities remain. Strong sales performances in these markets will help soften the negativity in the UK.
2008 will also give us a better perspective on the performance of Tesco in the USA. Whilst full critical mass is unlikely to be achieved during 2008 nonetheless the post-entry adaptations in response to local markets will become apparent and a clearer view of the responses of Wal-Mart and other local retailers will be seen.
Despite fierce competition in the UK, the market size has attraction for foreign retailers. Fashion retailers from outside the UK will continue to develop their brands and offerings with growth of those with a limited presence, for example Fast Retailing, and new entrants.
The pressures for pan-national sector consolidation are likely to provide opportunities, encouraged by weaker sterling or low share price, for a few substantial acquisitions by non-UK retailers. These companies will be looking beyond the current short term low growth to make investments that fit with their own strategic objectives of broader international expansion.
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