Georgia has been ranked as the top performing country in the region, offering the most attractive retail environment for international players, says a global report about retail development.

The 2015 Global Retail Development Index (GRDI) recognised Georgia as number one in the region and sixth out of 30 developing countries for retail investment.

The Index said Georgia’s "unsaturated retail environment” was an extremely attractive opportunity for international investors. Additionally, the report noted Georgia had a "stable GDP, solid per capita spending growth over the past five years, and an underpenetrated retail market”.

Each year the GRDI uses more than 20 macroeconomic and retail-specific variables to identify markets that are the most successful today, but also those that offer future promise.

This year’s Index examined the prospects for luxury goods in developing markets.

"Luxury remains a bright spot in emerging markets, as the wealthy have proven less vulnerable to economic woes than the general population, and mall developers have taken advantage of increased consumer spending and mobility. In that section, we take a deep dive into which markets present the most long-term opportunity and how luxury brands are adapting their strategies to succeed,” explained the authors of the study from global management consulting firm A.T. Kearney.

In this respect, Georgia’s shopping centre spaces has grown by 30 percent since 2013. Later this year the EastPoint Shopping & Entertainment Centre in Tbilisi is due to open and once complete, it will be the second-largest shopping mall in Georgia, trailing behind three-year-old Tbilisi Mall.

On a wider note the Index stated Georgia, Armenia and Kazakhstan were the region’s top performers, with the report’s authors mentioning these three countries in the study as "small gems”.

Georgia gained an overall ranking of 6th, Armenia placed 10th and Kazakhstan gained 13th place in terms of retail investment.

The Index noted Azerbaijan has become a luxury hot spot as more companies seek to tap into the country's oil-driven wealth. Russia, despite having the world's sixth-largest GDP, plunged in the rankings behind worsening economic conditions and political tension.

Meanwhile the Index revealed in Georgia there currently was empty retail space worth $8.4 billion USD. This space remained unused and was available for investors.

Georgia remains attractive for retailers across all categories. Despite growth and expansion in food retail, modern formats still represent only 30 percent of the market, with most key players considering traditional bazaars their strongest competitors,” read the report.

"Carrefour and local Goodwill (which sold a 60 percent stake to Italy's Milan Investment) remain the only hypermarket players, while the minimarket playing field is a bit more competitive.”

"SPAR entered the Georgia market in the summer of 2014 by acquiring Populi, the third largest retail chain, with plans to rebrand and expand its network from 51 to 80 stores by 2018. Local food retailer Nikora reinforced its leading position by acquiring a small regional chain of 12 supermarkets in December 2014,” read the report.

GRDI noted that a growing tourism sector had boosted the fast food market in Georgia. McDonald's, Subway, and Wendy's were now among the international brands that have expanded in capital Tbilisi, where 80 percent of the country's modern retail space is located.

KFC opened its first restaurant in December 2014, and two months later Dunkin’ Donuts opened its first two restaurants, but there are plans to expand to 35 restaurants nationwide by 2017.

Georgia's burgeoning apparel sector was represented by more than 40 international brands, including Marks & Spencer, Gap, Banana Republic, ALDO, and the Inditex Group's brands, said GRDI.

But despite many positive developments in recent years, the availability of modern retail space still posed a challenge, with many spaces outdated and inappropriate for more premium retail, said the Index.

Source:agenda.ge