Consumer goods and

retail outlook 2024

Higher footfall amid depleted savings
Intelligence that moves you forward
EIU is the research and analysis division of The Economist Group, a leading source of international business and world affairs
information. It provides accurate and impartial intelligence for corporations, governments, financial institutions and academic
organisations, inspiring business leaders to identify opportunities and manage risks with confidence since 1946.

EIU’s products include a Country Analysis service, providing comprehensive political and economic analysis and forecasts for
nearly 200 countries, and a portfolio of subscription-based data and forecasting solutions.

We specialise in:

Country analysis—access detailed country-specific economic and political analysis, data and forecasts, as well as assessments of
the business environment in different markets.

Risk analysis—identify operational and financial threats around the world and understand the implications for your business.

Industry analysis—gain insight into key market trends with five-year forecasts and in-depth analysis for six industries in 70
major economies.

Custom briefings and presentations—inform your strategy, develop executive knowledge and engage audiences. Our team is
available to book for boardroom briefings, conferences and other professional events.

Contact us for more information

To find out more about our solutions and the different ways we can help you, please get in touch or visit www.eiu.com.

LONDON DLF Cyber City, Phase – III DUBAI

Gurugram – 122002
Economist Intelligence Haryana, India Economist Intelligence
The Adelphi Tel: +91 124 6409486 PO Box No - 450056, Office No - 1301A
1-11 John Adam Street, London, WC2N e-mail: asia@eiu.com Aurora Tower Dubai Media City Dubai,
6HT United Arab Emirates
NEW YORK
United Kingdom Tel: +971 4 4463 147
Tel: +44 (0)20 7576 8000 e-mail: mea@eiu.com
Economist Intelligence
e-mail: london@eiu.com
900 Third Avenue HONG KONG
GURUGRAM 16th Floor
New York, NY 10022 Economist Intelligence
Economist Intelligence United States 1301 Cityplaza Four 12 Taikoo Wan
TEG India Pvt Ltd Tel: + 1 212 541 0500 Road Taikoo Shing, Hong Kong
Skootr Spaces, Unit No. 1, e-mail: americas@eiu.com Tel: + 852 2585 3888
12th Floor, Tower B, Building No. 9 e-mail: asia@eiu.com
CONSUMER GOODS & RETAIL OUTLOOK 2024
HIGHER FOOTFALL AMID DEPLETED SAVINGS

Higher footfall amid depleted savings

A slowdown in inflation will bolster retail volume growth,

but depleted savings and high food prices will act as
dampeners.
• Retail sales will grow by 6.7% in US-dollar terms and 2% in volume terms in 2024, helped by a
slowdown in inflation. But households have depleted much of their savings, so they will remain
highly price-sensitive.

• Expansion in developing markets will lead to double-digit growth in global online sales in 2024.
However, online retailers’ profits will remain under pressure as regulatory woes challenge the sector.

• Consumers’ preference for shopping at brick-and-mortar stores will bolster offline retailers,
especially discount retailers. Some will expand their footprint across geographies to accommodate
the high footfall expected in 2024.

• Food inflation will remain a concern in many developing economies. The El Niño climate pattern is
likely to push up rice prices in developing Asia. This will dampen discretionary spending at a time
when brands are looking to the region to offset slowdowns in mature markets.

A welcome slowdown in inflation will come hand in hand with a depletion in household savings,
posing new challenges for retailers and consumer goods manufacturers. Globally, real growth in
retail volumes will rise to 2% in 2024. Online retail, which has often been the driving force for retail
growth since the pandemic, will continue to grow, accounting for 14.6% of total global retail sales, but
challenges will abound.

Online sales growth will accelerate, but profits and jobs will face more
challenges
Since 2022 spiralling inflation in North America Growth in online retail will slow in wealthy
and Europe has been bad news for online retailers, markets
as consumers cut down on spending or went back (US$ value growth, % year on year)

to stores to hunt for bargains. In 2024 global South America Middle East & Africa Europe
Asia USMCA
growth in online sales in US-dollar terms 30

will return to double digits (10.5%) after a

20
contraction in 2022 and 7% growth in 2023. In
Europe this acceleration will mainly reflect a slight 10

revival of the euro against the dollar, but in Asia,

0
the Middle East and Africa, and South America
the lower penetration of organised retail will also -10

create growth opportunities. In contrast, growth -20

in online retail in the US (and in much of Western 2021 22 23 24
Europe) will be in single digits. Sources: Edge by Ascential; EIU.

1 © The Economist Intelligence Unit Limited 2023

CONSUMER GOODS & RETAIL OUTLOOK 2024
HIGHER FOOTFALL AMID DEPLETED SAVINGS

Despite an improved outlook in 2024, we do not have a sunny outlook for online retail. We expect
to see continued profitability pressures, market consolidation and regulatory roadblocks. High interest
rates across much of the world will make it difficult to attract new investment, and existing investors
will demand better returns. In developing markets, where consumers are highly price-sensitive, online
retailing is often (at least initially) loss-making. Profit and regulatory woes will shrink the number of
pure play (online only) retailers, which in turn will also have an impact on gig workers employed by
these businesses and potentially pose risks to retail and delivery jobs in 2024.
Online grocery delivery, which saw the fastest growth during the pandemic, is likely to be badly
affected in 2024. Several players across Europe, such as Deliveroo and Getir, have been exiting markets
and laying off employees amid rising food costs. Last but not least, the online retail sector will see more
regulatory pressures, from scrutiny of anti-competitive practices to bans on dark stores that raise city-
planning challenges.

Offline retail expansion will pick up pace

We forecast that global retail sales will grow by 6.7% in dollar terms in 2024, with brick-and-mortar
stores accounting for over 85% of total sales. 2024 will see the strongest pace of growth for offline
retail since the post-pandemic rebound of 2021. This recovery will be driven partly by the return of
international tourism but largely by the cost-of-living squeeze. Even though inflation will ease in 2024, a
search for lower prices, an unwillingness to pay delivery fees and the prioritisation of basic goods such
as food will lure many bargain-hunting consumers back to stores.
Recovery in footfall at stores will encourage many retailers to expand their physical footprint in
2024 (even as many small businesses around the world shut down amid prohibitively high costs and
interest rates). These expansion plans will not be limited to developing markets in Asia and the Middle
East, where Western brands will set up shops to offset sluggish growth at home. Brick-and-mortar
expansions are also on the cards for retailers in Europe and the US. Aldi, a German discount grocer, will
complete the acquisition of 400 new grocery stores in the south-eastern US. Costco, a bigger rival in the
US, will also open the first of its planned 30 new Sam’s Club (big-box stores) stores next year.
Even in inflation-ravaged Europe, supermarket chains Carrefour (France) and Colruyt Belgium
have announced plans to acquire new stores in Spain and Belgium, respectively, in 2024. New store
openings will not be limited to the grocery sector—even fashion retailers like Nordstrom (US) and
Primark (Ireland) will open new stores in the US next year. Although vacancy rates for retail real
estate remain high in many markets around the world, they have started to decline in 2023 and
should fall further in 2024.

Food inflation concerns will not be behind us

Food and beverage commodity prices will continue to decline in 2024, but this will not translate
into much relief for consumers. One of the main reasons for this is labour costs, which continue to
rise across retail and warehousing jobs. Moreover, with food prices still higher than in 2021, many
governments will step in to protect consumers. Italy has already negotiated with food makers and
retailers to hold down the prices of staple foods, while France’s efforts to bring forward annual price
negotiations are expected to bear fruit in early 2024.
We expect considerable regional disparities in price trends. Unlike in 2022-23, inflationary headwinds

2 © The Economist Intelligence Unit Limited 2023

CONSUMER GOODS & RETAIL OUTLOOK 2024
HIGHER FOOTFALL AMID DEPLETED SAVINGS

will grow stronger in developing and emerging

Asian consumers will face more food price
markets in 2024 as El Niño affects production of
increases
rice, coffee and cocoa. The outlook is particularly (consumer spending on food, drinks & tobacco, US$m;
concerning for southern and south-eastern 2020=100)

Asia, which account for 90% of the world’s rice India Indonesia Malaysia
Philippines Thailand Vietnam
consumption. The region’s households also 160
allocate a high share of their consumer spending 150
to food and beverages—from 31% in India and 140
32% in Indonesia to 42% in the Philippines. This 130
will make them very vulnerable to food price rises. 120
This in turn will dampen discretionary spending 110
by Asian consumers at a time when many brands 100
are looking to this region to compensate for
90
slowdowns in Europe and the US. 2020 21 22 23 24
Source: EIU.
What to watch
Scrutiny of supply chains. By the end of 2024 the EU’s deforestation regulation will prohibit the
importation of goods linked to land deforested after December 31st 2020. The biggest impact will
be felt in developing countries that specialise in selling products such as palm oil, coffee or cocoa to
the EU. Whereas the largest consumer goods companies, such as Nestle (Switzerland), have better
visibility of their supply chains, as well as lofty targets to ensure usage of deforestation-free materials,
most small businesses will struggle to meet these requirements. The technological investment (such
as in the blockchain) needed to better monitor supply chains will push up costs for EU businesses and
consumers.
More Brexit pains. The UK government will introduce post-Brexit border controls on fresh food
products from the EU in January 2024. The move has been delayed several times, while UK exports to
the EU already face border controls. The new import controls would add to costs for the food industry,
which would ultimately be passed on to consumers, potentially offsetting some of the gains made in
controlling inflation in 2023.
Plastic purge. About 175 countries, as part of a UN intergovernmental panel, are aiming to agree on
global standards for curtailing plastics pollution by the end of 2024. The task is difficult, especially amid
differences among the country members, but it is an important step towards resolving the plastics
problem. Current regulations on plastic waste control are fragmented, leading to uneven progress on
waste control. Several countries will also clamp down on plastics usage through national regulations—
for example, Germany will impose a levy on use of single-use plastics starting 2024.

EIU's weather forecast for retail and consumer businesses in 2024

Offline retail Online retail Food Non-food

Source: EIU.

3 © The Economist Intelligence Unit Limited 2023

EIU Viewpoint: Country Analysis
Preparing you for what’s ahead

Understand a country’s political, policy and economic outlook with our award-winning forecasts,
analysis and data. Our experts assess the global dynamics that impact organisations, so you can plan
and operate effectively.

What’s included?
• Global and regional outlook spanning politics, economics and market-moving topics
• Daily insights on the developments that impact the future outlook
• Executive summaries of country forecasts over the medium-term outlook
• Medium-term country forecasts on ~200 countries’ political and economic landscape
• Long-term country forecasts on the structural trends shaping ~80 major economies
• Industry analysis on the outlook for 26 sectors in ~70 markets
• Commodity forecasts on supply, demand and prices of 25 critical goods
• Macroeconomic data on forecasts, as well as historic trends
• Industry data on demand and supply of key goods, now and in the future
• Proprietary ratings on the business environment
• Thematic analysis of the cross-cutting issues that our experts expect to shape the global outlook
How Country Analysis helps you to stay ahead
Expansive coverage - global, regional and country-level analysis for nearly 200 markets, delivered by
our analysts. Every month, 20,000 data series are updated, enabling you to adapt and plan ahead.

Challenging consensus - stay ahead of your competitors. For more than 70 years our forecasting
teams have made bold calls, accurately.

A nuanced approach - intuitively designed to address politics, policy and the economy, our
methodology includes detailed insights in addition to data.

Robust, accurate information - apply insights with confidence. Our forecasts and analysis are non-
biased and rigorously researched.

To arrange a demonstration of EIU’s Country Analysis service or to discuss the content and features
included, please visit eiu.com/n/solutions/viewpoint/country-analysis/

4 © The Economist Intelligence Unit Limited 2023

Copyright

© 2023 The Economist Intelligence Unit Limited. All

rights reserved. Neither this publication nor any part
of it may be reproduced, stored in a retrieval system, or
transmitted in any form or by any means, electronic,
mechanical, photocopying, recording or otherwise,
without the prior permission of The Economist
Intelligence Unit Limited.

While every effort has been taken to verify the

accuracy of this information, The Economist
Intelligence Unit Ltd. cannot accept any
responsibility or liability for reliance by any person
on this report or any of the information, opinions
or conclusions set out in this report.