'Flag planting' in new territories is no longer a priority as international grocery retailers focus on getting better returns on existing overseas investments, according to IGD research.

Seventy-nine per cent of senior industry figures taking part in the IGD Global Retail Outlook survey said they believed retail globalisation would accelerate in the next five years - but many said growth strategies would be much more targeted.

"More than ever before, a presence overseas must deliver return on investment and retailers must bring a unique competitive advantage to the markets they enter," said Jonathan Gunz, senior business analyst at IGD and author of Global Retail Outlook: Planning Your Growth. "Maximising returns in existing territories will be a key consideration and building strong regional positions will become a priority."

Consolidation would create new opportunities for tactical acquisitions, but retailers were more likely to pull out of an overseas market if assets were under-performing or showed no potential, he added.

Survey respondents saw Eastern Europe and Asia as the fastest-growing regions in the next five years.

IGD forecast that Wal-Mart would remain the leading global grocer until at least the end of 2011.

But it expected Tesco to close the gap on the current number two Carrefour.