Rwanda tops first African Retail Development index

Rwanda, Nigeria, Namibia, Tanzania and Gabon occupy the top five places of the inaugural A.T. Kearney African Retail Development Index (ARDI). South Africa ranks seventh due to the developed nature of its retail market.

The ARDI is a useful framework for retailers because it not only identifies the markets in Africa most attractive for retail expansion today, but those that offer the most potential for the future.

Africa is brimming with opportunities, not only for local and regional players, but also for large global brands and retailers.

South African brands and retailers have been at the forefront of African expansion but may soon see global competition coming in. For South African players to keep their competitive advantage, sound strategies and investment plans will be required.

With a billion people and growing economies, seven of the top 10 ARDI countries are among the 10 fastest growing economies in the world.

“Formal” retail, which takes place in malls, shopping centers, and other defined trade areas, remains in the early stages in most Sub-Saharan Africa countries, with the exception of South Africa, and is limited primarily to a handful of urban areas.

Low rates of formal retail coupled with increasing urbanization and the relative stability of many African economies represent massive room for retail growth.

Mirko Warschun, A.T. Kearney partner and ARDI co-author says, “The top 10 countries in the Index are diverse in terms of scale and growth potential.”

“It is essential that retailers understand where African countries are in the evolution of the retail landscape and the stages of market development to craft their expansion strategies for Africa.”