IMAP Inc., a global merger and acquisition firm, released its annual Retail Industry Global Report, which details merger and acquisitions activity by industry, country and region over the last 12 months.

The report finds that merger and acquisition volume is down during the year ending with the third quarter of 2010 compared with the same period 12 months ago. Overall, IMAP says that $17.1 billion in retail merger and acquisition activity took place in the 12 months up to the end of the third quarter of 2010 in contrast with $25.7 billion in the 12 months up to the end of the third quarter of 2009.

The United Kingdom has been the most active country in the past 12 months with deal volume amounting to $3.9 billion in 161 transactions. The United States is second with transaction volume of just more than $3 billion in 370 deals. South Korea, France and China round out the top five markets.

In the future, IMAP advisers predict that growth among foreign players will drive M&A activity, consolidating the highly fragmented retail industry. The firm also expects large grocers and mass merchants to invest in emerging markets.

In addition, there will be continued activity among online retailers. Online retail amounts to 2.5 percent of total global retail sales, according to IMAP, which expects that figure to continue to increase.

“The recent economic recession has caused consumers to change their buying habits,” IMAP Retail Industry Group Chairman Marc Gillespie said in a statement in conjunction with the report’s release. “They now collect information about features, prices, warranties, availability and environmental impact, and then compare all of these with competitor prices before making a purchase. As the market matures, targeting the right customer is crucial, which is why many retailers are using social media as a marketing tool, offering international options and adopting multi-format strategies such as online stores, catalogs, and mobile and convenience stores.”