Thursday, May 30, 2024

The state of Europe’s grocery market

McKinsey & Company and EuroCommerce have taken a comprehensive look at the key trends shaping the European grocery industry in the coming years.

Their new report, ‘The state of grocery retail 2024: Europe’, is based on interviews with four CEOs, a survey of more than 30 European grocery leaders, and a survey of over 12,000 consumers across 11 European countries.

Some of the key trends include:

  • In 2024, grocery retailers will continue to feel margin pressure, which is a top three priority for 70% of surveyed CEOs. To continue shielding consumers from price increases, retailers are likely to prioritise supplier negotiations.
  • While over 45% of the surveyed European consumers state they are still looking for ways to save money when shopping in 2024 (compared to 51% a year ago), initial signs indicate that high-income households are trading up again, with a higher net intent to buy more high quality or organic products.
  • As consumers spend more time on the move, the food-to-go market is surging. Despite the inflationary environment and consumers trading down, the foodservice industry outpaced the grocery retail industry by ~3 percentage points.
  • Progress on sustainability has been made, but there’s still a long way to go. Although 29% of the 2025 Scope 1 and 2 emission reduction targets for the top 10 retailers have already been achieved, none of them reports their progress on Scope 3 targets yet.
  • 20 out of the top 30 European grocers already have an established retail media (RM) business. 2024 will be marked by a “bold expansion” of retailers’ RM footprint.
  • Across Europe, grocers are faced with a “higher-than-ever” number of vacancies, while the average tenure of employee retention shortens.

This report is the fourth in a series of reports aimed at shedding light on the state of grocery retail in Europe, now and in the years to come.

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