July 28 (Bloomberg) -- South usa may be the next retail frontier as Brazil,Uruguay and Chile top India and china for new expansion opportunities.

The location made the largest gains within an annual ranking of the top 30 emerging countries for retail development,according to a report by management consulting firm A.T. Kearney. That improvement puts four South American countries within the top 10 the very first time,said Hana Ben-Shabat,a brand new York-based partner in a.T. Kearney who started the ranking 10 years ago.

South American finance industry is increasingly appealing to foreign companies due to their "very healthy" retail spending and enormous urban populations with rising disposable incomes,Ben-Shabat said. Latin American finance Messenger Bags industry is showing strength appearing out of the recession,which helps keep sales accelerating,she said.

"The region is ready for that next wave of contemporary retail growth," Ben-Shabat said. "It makes sense to purchase brands in those markets because you're going to possess some large percentage of consumers who're young today and who are going to grow with the brand into the long-term."

Uruguay ranked second on burberry bags outlet the Global Retail Development Index,upgrading six spots from last year,while Chile arrived third after placing sixth in 2010. These countries trail Brazil,"now among the developing world's most attractive markets for retailers," according to the report. Chile's economy grew 9.8 percent at a yearly rate for the three months ended March 31,in contrast to 6.8 percent for Uruguay and Brazil's 4.2 percent.

Credit Bubble?

Companies ranging from Wal-Mart Stores Inc.,the earth's largest retailer,to LVMH Moet Hennessy Louis Vuitton SA,the earth's largest maker of luxury Ugg New Style Boots goods,are popular continent even amid concerns about a credit bubble.

Brazil's Bovespa stock index has fallen 20 % from a November at the top of investor concern about rising inflation. In December,the central bank increased reserve and capital requirements to slow consumer lending. Chile and Uruguay have risen their benchmark rates within the past two months.

South American economies have embraced domestic demand-led growth,while their governments generally have a "hands-off" approach by,for example,resisting price controls,according to Pedro Tuesta,a Washington-based economist for Latin America at 4Cast Inc.,a worldwide market analysis firm. They're "very,very receptive to foreign capital investments," he explained.

India and China placed in the index's top three for quite some time before dropping to fourth and sixth,respectively,this year. The low rankings are indicative of the faster pace of growth in South American UGG Vogue Boots economies and not an indication of falling retail potential in India and China,Ben-Shabat said. Because their finance industry is already "mature," companies are thinking about second- and third-tier cities for expansion,she said.

??Masters of Globalization'

The index,now in its 10th year,is developed using 25 macroeconomic and retail-specific variables to assist companies prioritize their global expansion strategies.

Wal-Mart and France's Carrefour SA,the earth's second- largest retailer,are "masters of globalization," having made developing-market expansion important,based on the report. Bentonville,Arkansas-based Wal-Mart entered Brazil in 1995 and Chile in 2009 and today operates 484 and 290 stores,respectively,during these Gucci watch countries,the organization said in June.

Chile,together with Mexico and China,had the best comparable-store sales growth as well as "the highest percentage sales increase for the quarter compared to this Prada shoulder past year," Chief Executive Officer Mike Duke said on a May 17 conference call.

Failed Merger

Carrefour,meanwhile,has more than 650 retail locations in Brazil,based on its 2010 annual report. The retailer,based near Paris,will continue to pursue growth opportunities in Brazil despite a proposal to merge with Cia. Brasileira de Distribuicao Grupo Pao de Acucar failed this month,Chief Financial Officer Pierre Bouchut said last month.

Another French competitor,Saint-Etienne-based Casino Guichard-Perrachon SA,setup franchises with grocers in Uruguay within the 1990s. The business's 53 Uruguayan stores made up 3 % of total international revenue as of Dec. 31,based on its 2010 annual report. In Brazil,Casino has a lot more than 1,600 stores; they make up 42 percent of global sales.

Uruguay has "very attractive economic and retail fundamentals," including high consumption per capita,an export-oriented economy,a tourism-centered service sector and a favorable environment for foreign investment,said Almacenes Exito SA,which is thinking about buying a stake in Uruguayan supermarkets from majority shareholder Casino.

Exito used the A.T. Kearney report included in its analysis for the purchase,it said inside a statement.