The rise of value-conscious consumerism

Guido Giammattei, EM Equity Portfolio Manager, looks at how value retail presents an ongoing global secular trend and shift in consumer habits.

With food and grocery value retail primely positioned to benefit from this wave, discounters are gaining momentum across emerging markets.

We look at the six key growth drivers of this shift:

1. A shrinking global middle income class is a key driver for value retail. We look at how China is an example of this phenomenon.
2. The growing spending power and consumption of younger demographic cohorts are expected to spearhead spending patterns for the foreseeable future.
3. Multiple macroeconomic trends, with economic uncertainties, higher inflation and policy rates, are compelling consumers across the globe to seek out value options.
4. We note that discounter growth continues to outpace other retail categories, showing remarkable structural growth irrespective of economic conditions.
5. The existence of informal markets within emerging markets presents a significant growth opportunity for value retail.
6. The rise of private labels, which offer comparable quality products at lower prices, are increasingly boosting the rise and appeal of value retailers globally.

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