Will Retail Global Sourcing Begin to Slow?

In my view, while it's unlikely that retailers will begin to slow down their global sourcing march, another perspective by Deloitte argues that retailers could move away from low-cost country sourcing for a number of reasons. India's Economic Times notes that according to the Deloitte 2007 Global Powers of Retailing study that "retailers could soon stop procuring from low-cost sourcing bases like India and China ... a combination of political and economic forces will increase the cost of, and reduce the access to, imports coming into the US, Japan and Europe, forcing retailers to search for higher-cost domestic sources."

I'm always for a contrarian perspective, but personally, what I believe is far more likely will be a re-allocation of retail sourcing and trade based on domestic, trade and other issues. Perhaps in retail, China, India, Malaysia, and Vietnam might lose a portion of their current spend, but not to domestic suppliers. I'd wager that retailers might rebalance their efforts around Latin America and other global destinations. If you're curious to read the full Deloitte report, you can find it here.

Jason Busch

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