Study: Global retail sales will slow in 2020
Global retail markets will deliver mixed results in 2020.
That’s according to a new report from The Economist Intelligence Unit, which found that in volume terms, sales growth will slow in 2020 compared with 2019, but in U.S. dollar terms, growth will accelerate. The 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. But even in Asia volume growth will be slower than in 2019, reflecting subdued demand in China.
"It's a mixed picture for retailing in 2020,” said Shveta Sharma, consumer goods analyst at The Economist Intelligence Unit. “Although there will be areas of opportunity, particularly in Asia, there are several threats to the industry. The U.S.-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."
The report predicted that in volume terms, growth will slow to 2.2% in 2020, compared with 2.5% in 2019. Global retail sales will accelerate in U.S. dollar terms, rising by 4.8%.
Online retail will continue to undermine the competitiveness of physical stores in 2020, according to the report. 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, the report advised.