Eurpe retail

Online shopping is fast becoming the growth engine of the UK retail sector, accounting for half
the rise in spending last year according to retail monitoring group Verdict Research. It
estimates that internet spending rose almost 29% last year, nearly 20 times faster than the
sector overall at just 1.5%.
Online shopping now accounts for most of the sector’s growth and at £8.2 billion is almost
equal to the £9.4 billion achieved by department stores – and it is still only 3.1% of the total
£265 billion sales.

UK underestimated
UK productivity has been given a boost by the Office of National Statistics, which said in
February of this year that Britain’s investment in information and communications technology
has been severely underestimated for more than a decade.
A revision of the figures could raise Britain’s gross domestic product (GDP) by 1% and add up
to 0.1% to growth rates in each year since 1992. It could also demonstrate that the UK
maintained its position as the world’s fourth largest economy much longer than had been
thought.
For 2003 alone, the underestimation calculated at today’s prices is as much as £13 billion,
bringing the total investment figure to 1.9% of the UK’s GDP.

USA
Changing household patterns create opportunities for construction, retail and
finance.
Rising affluence is changing household patterns in developing countries. Demand for higher-quality
housing is increasing in step with the rise of the urban middle class. This creates opportunities for
the construction industry, real estate services, retailers of household goods and services, and the
mortgage finance industry.

Key points
Rising affluence leads to changing household structure. Families have less children, the number of
single person households increase and households become smaller, while dwellings become
bigger;
The demand for housing, household goods and services and housing finance (mortgages) is set to
rise. The beneficiaries are household goods retailers and the construction, real estate and finance
industries;
Developing economies with a rapidly expanding urban middle class are the most attractive
markets. Urbanisation is set to be fast in Asia Pacific, Latin America and Africa and the Middle
East.

Background
Rising living standards lead to a change in household structures:
Rising affluence leads to a reduction in the number of children that parents have. The birth rate in
developed economies of Western Europe was low at 11.9 live births per 100,000 people in 2006
and 14.0 in North America. Birth rates are much higher in developing economies such as Africa
and Middle East (33.8) or Latin America and Caribbean (19.2);
Only 32.7% of total households in Western Europe comprised of couples with children in 2006,
compared to 51.0% in Asia Pacific and 54.3% in Africa and the Middle East, regions which are a lot
poorer than Western Europe;
The average number of people living in a household is closely related to living standards. Africa
and the Middle East had the lowest per capita GDP and the highest number of people living in the
average household (4.7) in 2006, as did Asia Pacific (4.1) and Latin America (4.0). The
industrialised nations of Australasia (2.7), Western Europe (2.6) and North America (2.5) have
much lower rates. The communist regimes of Eastern Europe (2.7) left a legacy of abundant
housing and small households but also low living standards.