The retail trade in Europe

The retail trade in Europe continues to face a number of challenges in 2025. Key challenges include constrained consumption due to economic uncertainty, rising inflationary pressures and chronic labour shortages.

Key data:

• According to the annual report, prepared by McKinsey & Company in partnership with EuroCommerce – the leading European trade organisation bringing together national associations of 28 countries and over 5 million companies – grocery sales in Europe are set to grow by 2.4% in 2024. In Bulgaria, the official partner of EuroCommerce is the Association for Modern Trade (AMT).
• The reported growth rate is marginally above inflation in the grocery sector over the same period, which stands at 2.3%. The difference of 0.1 percentage points indicates relatively limited real growth.
• Continued economic pressures are having an impact on consumer behaviour, leading to increased spending caution. However, sentiment among retail executives is more optimistic about market developments in 2024.
• Data from the analysis shows relative stability in consumption habits, with minimal deviations in consumption patterns compared to previous periods.
• Despite some indications of recovery in individual markets, the medium- and long-term forecasts remain moderate. Weak volume growth and continued pressure on profitability are expected. Average annual growth of approximately 0.2% within Europe is forecast to 2030, with retailers facing further challenges from inflation and skilled labour shortages.

In the longer term, the success of the retail trade sector will depend on its ability to adapt to changing economic conditions and meet the needs of the future workforce.

TPA Bulgaria

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