Retailers believe the US is the hardest market to break into despite it being the top destination they want to grow in, a survey from Barclays shows.
Carried out by Conlumino, results showed retailers thought the US was the most challenging market even with the growth of online retailing and the seemingly similar cultures and values shared by British and American customers.
China was the second most difficult location with a third of retailers revealing they had experienced difficulties when trying to set up shop.
Germany was named as the number one destination retailers said they want to expand to in the next five years, followed by China and Australia.
Barclays head of retail and wholesale Richard Lowe said: “On the surface the US would appear to be an easy market in which to secure a foothold but its sheer scale means achieving commercial success across the whole country is an incredible feat.”
More retailers are looking overseas to expand as growth opportunities in the UK “become increasingly difficult to extract”, said Lowe. Between 2012 and 2016, total UK retail spend is expected to grow by about 11.5% to £345.6bn. This compares to expected growth in the US of 17.5% to £2.3trn by 2016, while in China retail spend is expected grow 85% to £3.6trn by 2016.
Russia’s retail spend is expected to surge 68% to £649.8bn while Brazil’s is anticipated to rocket 49% to £536bn in the next five years.
Nearly a third of retailers revealed they would launch websites in the countries where they wanted to expand in rather than opening stores due to its less expensive model. Among those retailers who had already ventured abroad this increased to 52%.
Africa remains one of the final countries to crack but almost a quarter of retailers said they believe Africa will be the new retail growth story within the next 10 years.
Of the 21% of retailers surveyed that said they generate sales on the continent, 53% said South Africa is their top market with other well-performing markets including Chad, Congo, Morocco and Nigeria.
Retailers named South Africa as their top destination to grow in Africa and Ghana and Kenya were second and third choices, due to Africa’s growing middle class and the take up of mobile technology.
Lowe said: Many of the trends that have driven the economic development of emerging economies in Asia and South America are beginning to take hold in Africa.
“Its rapidly expanding middle class increasingly needs goods and services, which cannot be catered for domestically, providing a golden opportunity for internationally minded retailers.”