That said, the fall in profit—its first in decades—and the loss of market share to Asda and Sainsbury generated unease among shareholders and highlighted a need to address significant challenges in Tesco’s home market. Tesco still controls a sizeable 30% of the UK retail market, but this share is slowly eroding.

Despite his vigour in addressing the problem, many of the initiatives unveiled by Mr Clarke are not new, something that he admits in statements accompanying the group’s latest results. Rather than innovating, Mr Clarke’s focus for Tesco is a “back to basics” attempt to re-engage with consumers via store facelifts, relaunching the value range and boosting customer satisfaction. In the online space, Tesco’s domestic strategy is more of a departure, especially if it seeks to challenge pure-play e-tailers such as Amazon by allowing third-party sellers into its online marketplace. This could be an important asset in improving choice and availability for web-savvy shoppers.

The scale of Mr Clarke’s commitment to the UK is notable for the size of the investment he’s committing to the project: £400m on store facelifts and £600m on increased staffing levels. A billion pounds is a lot of money, but for Tesco it only amounts to 1.5% of group revenue, and just over a quarter of group profit.

The biggest gamble, then, is not the amount that Mr Clarke is investing, but the fact that it is directed at operations in the UK. A slight fall in profit and market share in the country is a concern but, given the general weakness in the British economy, embattled consumers are still likely to favour price over the renewed service that Mr Clarke is investing in.

Emphasising the domestic could spurn much stronger opportunities elsewhere, especially fast-growing emerging markets in Asia. Over the past five years, Tesco’s average annual UK profit growth is only around a fifth of growth at its operations in Asia. Tesco’s multinational competitors are expressing commitments to new markets in Asia, Sub-Saharan Africa and Latin America. They are also watching India very carefully as the retail market gradually opens. It is worth shareholders asking whether £1bn might go further if it is invested in these markets.

The EIU's Consumer Goods Briefing assesses the consumer goods and retail industry in the world's biggest markets. It leverages the expertise of EIU analysts and data from Planet Retail to offer five-year forecasts for a range of sub-sectors.

No doubt, OpCapita has done plenty of due diligence to secure the approval of six banks owed an estimated £85m by Game. It probably picked up Game for next to nothing, judging by the late timing of its intervention, and stands to inherit a leaner operation, considering the closures and redundancies already announced. Ultimately, Game failed because it lost the confidence of big video game makers, which refused to supply it. If OpCapita can restructure its debt and restore confidence, Game’s immediate situation will improve.

Unfortunately, computer games are increasingly being sold through online channels. With their bricks-and-mortar overheads, high-street retailers cannot easily compete on price, or, indeed, on the convenience of online sales. The growing popularity of app downloads for smartphones and tablets is an additional challenge. EuroGamer, a website, reckons UK videogame sales shrank by 13% in 2011 to £2.5bn. In future, consoles could well become the preserve of a dedicated core of gamers, too small to interest or support a mass-market retailer.

Even so, Games Workshop has somehow retained a high-street presence in the increasingly niche market for role-playing games, and could provide lessons for OpCapita. Games Workshop’s success owes much to the vertical integration of its supply chain; for its part, OpCapita could also explore synergies between Game and Comet, an electronics retailer it bought for a symbolic £2 late last year. More likely, OpCapita will attempt to diversify Game’s activities to appeal to a broader market. But that will require investment and rebranding, and it will expose Game to competition from more generalist retailers.

The EIU's Consumer Goods Briefing assesses the consumer goods and retail industry in the world's biggest markets. It leverages the expertise of EIU analysts and data from Planet Retail to offer five-year forecasts for a range of sub-sectors.

It seems inevitable that India will need to open up its retail sector to allow it to flourish. Domestic retailer Future Group, which is in talks with a number of potential foreign partners, claims that foreign investment would boost its annual sales growth from 25-30% to 40-50%.

But while hope springs eternal, the likes of Carrefour and Wal-Mart should not hold their breath. The Indian economy grew at its weakest pace in two years in the quarter to September and crucial state elections are due next year. This makes finding the time to forge a political consensus on the reforms difficult. Proposals to water down the bill by reducing the cap on foreign ownership have also fallen on deaf ears. Some have already gone as far as writing an obituary for the bill. This may be premature. Global retailers and their domestic supporters will pull out all the stops to open up a retail market that the EIU expects to be worth US$1.6trn by 2016.

The EIU's Consumer Goods Briefing assesses the consumer goods and retail industry in the world's biggest markets. It leverages the expertise of EIU analysts and data from Planet Retail to offer five-year forecasts for a range of sub-sectors.

John Lewis admits that snow disruptions during the same week last year may flatter the latest figures. At the same time, last week’s public-sector strike could have given some an extra day to get in some Christmas shopping. Also, and perhaps most importantly, the John Lewis brand may no longer be considered a reliable gauge of the health of British high streets.

In its latest fiscal year, John Lewis reported market-beating sales growth of 12%, boasting that its “never knowingly undersold” slogan struck a chord with British consumers. The retailer also benefits from robust online sales, which rose by 38% during the fiscal year. Offline retailers have been trying to bring forward sales to lure shoppers away from their computers during the UK equivalent of “Cyber Monday”. But whatever channel they use, retailers will approach the crucial festive shopping season with some trepidation, as extremely difficult trading conditions will ruthlessly separate the winners from the losers.

The EIU's Consumer Goods Briefing assesses the consumer goods and retail industry in the world's biggest markets. It leverages the expertise of EIU analysts and data from Planet Retail to offer five-year forecasts for a range of sub-sectors.

The impact of Europe’s woes on global growth is significant, not least via reduced demand for emerging markets’ exports. We expect global GDP growth, at purchasing-power parity, to slip to 3.3% in 2012, down from 3.8% this year (at market exchange rates, growth appears more modest). Rebuilding-related growth in Japan will support growth, but waning momentum in the US will dampen global prospects. Emerging markets will grow swiftly by comparison, but less swiftly than in previous years.

The biggest risk to this forecast is the outcome of the euro area’s financial crisis; a break-up of the currency union would produce a much deeper global downturn than we currently predict. (For more on our thinking about a potential euro break-up, see the special report “After Eurogeddon”.) In this context, growth that only narrowly avoids recession—the IMF considers global growth below 3% to represent a world recession—may not be such a gloomy forecast after all.

The EIU's Financial Services Briefing delivers a complete picture of the finance industry in markets around the world, combined with five-year forecasts of key sub-sectors.

It is not surprising that London ranks highly as a retail mecca, given its allure to shoppers visiting from China, the Middle East and elsewhere. The capital’s appeal to locals, however, is not as apparent. Last week, the Bank of England revised down its forecast for GDP growth, unemployment hit a 15-year high, and consumer confidence plumbed historically low depths.

The EIU/Global Blue survey’s headline rankings are derived from an equal-weighted index. The survey website allows users to alter these weightings, however, and after some tinkering it becomes clear that London’s position is highly sensitive to one’s view on affordability. When it comes to affordability metrics, the British capital ranks 24th out of 33 cities rated; boosting the weight of affordability in the index sees London drop behind Barcelona and Madrid in the overall rankings.

London may benefit from a wide range of shops, but it seems increasingly reliant on shoppers from abroad as hard-hit, cost-conscious locals will probably keep a tighter grip on their wallets.

The EIU's Consumer Goods Briefing assesses the consumer goods and retail industry in the world's biggest markets. It leverages the expertise of EIU analysts and data from Planet Retail to offer five-year forecasts for a range of sub-sectors.

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Annual retail sales in China grew by 17% in October, and the latest data for the luxury goods market there suggests even faster expansion at the top end of the market. The EIU expects a five-fold increase in the number of households earning more than US$50,000 in both China and India between 2010 and 2015.

One factor driving growth at Burberry, which reported buoyant profits today, was the decision last year to acquire its Chinese operations outright and embark on an ambitious store-opening plan in China and India. That said, the company’s shares are down by 15% from their July high; some of the fall is likely down to profit-taking, but fears of a Chinese slowdown are also weighing on shares. However, despite the pitfalls of relying so heavily on markets like China and India, their potential is too big to ignore, especially given the thoroughly depressing outlook for retailers closer to home.

The EIU's Consumer Goods Briefing assesses the consumer goods and retail industry in the world's biggest markets. It leverages the expertise of EIU analysts and data from Planet Retail to offer five-year forecasts for a range of sub-sectors.

Morrisons is tapping into a consumer trend that always asserts itself in times of economic uncertainty: a back-to-basics approach among consumers. Morrisons’ grocery-heavy product mix favours this approach, on the simple basis that people will always need to eat but will be less inclined to buy more expensive, income-elastic goods stocked by diversified retailers such as Tesco and Asda.

In this sense, some retailers become victims of previous successes when times are tough, while those that seek to keep things simple thrive (relatively) as consumers retrench. The increasing focus on, and expansion into, non-grocery items is hampering the likes of Tesco while Morrisons benefits from a more conservative approach to non-grocery products.

Heavy discounters are the masters of this practice, buying heavily on limited product lines to keep inventories tight and prices low. An Aldi store may feature 1,000 product lines versus a Tesco shop with up to 40,000. Morrisons sits somewhere in between. As the “Aldi effect” sees discounters grow at the expense of mainstream retailers, Morrisons maintains a steady course. To this end, perhaps its latest results aren’t so surprising after all.

The EIU's Consumer Goods Briefing assesses the consumer goods and retail industry in the world's biggest markets. It leverages the expertise of EIU analysts and data from Planet Retail to offer five-year forecasts for a range of sub-sectors.

With droughts forecast to push up commodity prices over the coming year we look at where consumers are already getting a good, or raw, deal on one of the most basic staples, bread.

The Economist Intelligence Unit compares typical prices for a standard one kilogram white loaf of bread. Types will vary from city to city depending on tastes, but the fact remains that bread is an integral part of many diets. In Paris, where boulangerie offer a range of specialist loaves, bread can cost over ten times more than in Tehran, where flat Barberi bread is most common.

The EIU's Consumer Goods Briefing assesses the consumer goods and retail industry in the world's biggest markets. It leverages the expertise of EIU analysts and data from Planet Retail to offer five-year forecasts for a range of sub-sectors.