Global retail sales will slow in 2020
MEDIA RELEASE
DECEMBER 4, 2019
Global retail sales will slow in 2020
• Global retail sales will accelerate in US dollar terms, rising by 4.8% to reach US$20.2trn.
• However, in volume terms, growth will slow to 2.2%, compared with 2.5% in 2019. Asia will lead the way but will also see a slowdown.
• The US and China trade war will remain among the biggest concerns for the sector, along with the growth in online competition.
Global retail markets will deliver mixed results in 2020, says a new report from The Economist Intelligence Unit. In volume terms, sales growth will slow compared with 2019, but in US dollar terms growth will accelerate. This divergence will reflect differing regional trends in demand, pricing and exchange rates, with developing markets outpacing developed ones. The fastest regional growth will be in Asia, which will account for nearly 45% of global retail sales next year. Even here volume growth will be slower than in 2019, reflecting subdued demand in China. Shveta Sharma, Consumer Goods Analyst at The Economist Intelligence Unit, says:
"It's a mixed picture for retailing in 2020. Although there will be areas of opportunity, particularly in Asia, there are several threats to the industry. The US-China trade war, Brexit and the protests in Hong Kong will all take a toll, while some retailers will also struggle to keep up with the continued shift online. We expect more store closures and job cuts."
Online retail will continue to undermine the competitiveness of brick and mortar stores in 2020. Growth will be driven by social media apps such as TikTok and Instagram, as well as better digital payment systems. Retailers and consumer goods producers will need to adapt quickly to changing local conditions, shifting suppliers and closing stores as demand patterns change. However, the EU is leading a backlash, scrutinising the marketing tactics of online players as well as their efforts to avoid taxes. The scale of job cuts will also prompt more scrutiny in the US, in the run-up to November's presidential election.
ENDS.
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The Economist Intelligence Unit (The EIU) is the world's leading resource for economic and business research, forecasting and analysis. It provides accurate and impartial intelligence for companies, government agencies, financial institutions and academic organisations around the globe, inspiring business leaders to act with confidence since 1946. The EIU products include its flagship Country Reports service, providing political and economic analysis for 199 countries, and a portfolio of subscription-based data and forecasting services. The company also undertakes bespoke research and analysis projects on individual markets and business sectors. More information is available at www.eiu.com
The EIU is headquartered in London, UK, with offices in more than 40 cities and a network of some 750 country experts and analysts worldwide. It operates independently as the business-to-business arm of The Economist Group, the leading source of analysis on international business and world affairs.
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