This report is an annual global publication covering three continents, with dedicated reports for Asia, Europe, and North America. It is a continuation of a partnership between McKinsey & Company and EuroCommerce, designed to provide executives with a comprehensive view of the market and future trends.
2024 was a year of mixed emotions for European grocers. Volume grew again, albeit slowly, some consumer segments traded up, and AI has been creating value for some grocers. Now, looking ahead to 2025, cost pressure remains high, some supply chains are highly volatile, and many shoppers are still cautious as economic pressure persists.
The questions we hear from grocery executives mirror the mixed picture of 2024: How can grocers attract the more affluent shoppers as well as those whose price sensitivity remains high? What will the shopper of tomorrow look for? Where are the most attractive pockets of growth? How can opportunities from sustainability be captured? Finally, how can grocers benefit from data and AI most effectively?
While the future remains uncertain, we have created a rich fact base to help leaders in European grocery retail navigate the coming years. For this report, we surveyed more than 14,000 consumers and over 30 grocery executives from more than a dozen countries across Europe. Additionally, we interviewed four grocery CEOs. The interviews, surveys, and analyses were conducted in early 2025.
Developments regarding possible tariffs or other trade restrictions that unfolded in March 2025 are not reflected in the report.
To mark the fifth anniversary of The State of Grocery Retail Europe publication, we have added various new features, including a five-year outlook, a data-driven analysis of the signature practices of successful grocers, and a proprietary volume growth model to inform the assessment of growth opportunities in different parts of Europe.
Once again, we combined our policy and sector knowledge with McKinsey’s global expertise and analytical rigor. We hope this report will offer new insights and perspectives to help European grocers navigate ongoing uncertainties and seize future growth opportunities.
In 2025, the recovery is expected to gain momentum. Grocery retail CEOs in Europe are slightly more optimistic than they were last year. Nevertheless, the next few years are expected to remain challenging, with low volume growth and sustained pressure on profitability. To thrive in this competitive landscape, grocers could double down on pockets of growth through differentiation, focus on execution efficiency, meet the needs of the consumer of the future, and leverage data, AI, and technology.
For the European grocery sector, 2023 was all about inflation—again. European food price inflation averaged 12.8 percent in 2023, reaching its highest level since the end of the Second World War. While unfavorable market conditions put a strain on consumer wallets and margins are pressured by rising costs, there are signs of hope: inflation has stabilized, real wages are recovering, and fewer consumers indicate an intent to trade down, with some groups even inclined to trade up.
This report examines the most prevalent trends that will influence the grocery industry in 2024 and beyond. How can grocers mitigate further cost increases and improve their margins? Will uptrading return and propel grocery sales again? What does the future hold for food to go? Will sustainability targets be reached on time? What needs to happen for players to get ahead in the online grocery market? How can grocers develop retail media businesses that support profitability reliably? Where should grocers invest in AI and advanced analytics to achieve the highest impact? Finally, in a world of tight labor markets, how can grocery retailers attract and retain the right talent for future growth?
The State of Grocery Europe is an annual publication. This year’s report, Signs of Hope—The State of Grocery Retail 2024: Europe, is a continuation of a partnership between McKinsey and EuroCommerce, and it is designed to provide executives with a comprehensive view of the market and future trends. In preparing the report, we surveyed more than 12,000 consumers across 11 European countries and more than 30 grocery executives from more than 15 countries across Europe. In addition, we interviewed four grocery CEOs. We combined EuroCommerce’s
policy and sector knowledge with McKinsey’s global expertise and analytical rigor. We hope this report will offer new insights and perspectives to help grocers navigate ongoing uncertainties and take advantage of future growth opportunities.
For the European grocery sector, 2022 was all about inflation and growing consumer price sensitivity. This led to the biggest decrease in the margins of grocers in five years. In real values, turnover dropped by 7.1 percent, driven by intensified downtrading across income brackets. While margins are decreasing, interest rates and capital costs are rising. As a result, many grocery retailers see the challenge is financing the investments both in sustainability and technology that are necessary to reduce emissions, build resilience, and drive future growth.
This report takes a comprehensive look at the key trends shaping the grocery sector in the coming years. How will the fact that consumers plan to save more money on food affect different formats, channels, and categories? Will grocery retailers need to look for further economies of scale to better deal with rising costs and increased margin pressure? To what extent are grocers equipped and resolved to leverage analytics and automation to drive productivity? As e–grocery largely retains the uplift observed during the pandemic and meal delivery grows, will more online offerings reach break–even in 2023? Finally, will more grocers join the ranks of the pioneers who already engage their suppliers to reduce greenhouse–gas emissions that occur during food production?
The State of Grocery Retail report is an annual global publication covering three continents, with dedicated reports for Asia, Europe, and North America. This year’s report, “Living with and responding to uncertainty – The State of Grocery Retail 2023: Europe,” is a continuation of a partnership between McKinsey & Company and EuroCommerce, designed to provide executives with a comprehensive view of the market and future trends. In preparing the report, we surveyed more than 12,000 consumers across eleven European countries and almost 50 grocery executives from more than 20 countries across Europe. In addition, we interviewed three sector thought leaders and pioneers. We combined EuroCommerce’s policy and sector knowledge with McKinsey’s global expertise and analytical rigour.
Over the past two years, grocery retailers responded by becoming more efficient, resilient, and innovative. They will be tested in 2022 by a number of new challenges, from increased inflation and the enduring rise of e-commerce to evolving consumer preferences. This report highlights new insights and perspectives that will help grocery retailers navigate these market headwinds.
The State of Grocery report is an annual global publication covering three continents, with dedicated reports for Asia, Europe, and North America. This year’s report, “Navigating the market headwinds – The State of Grocery Retail 2022: Europe,” is a continuation of a partnership between McKinsey & Company and EuroCommerce, designed to provide executives with a comprehensive view of the market and future trends.
In preparing the report, we surveyed more than 12,000 consumers and around 60 grocery executives across Europe. We interviewed six industry thought leaders and pioneers. We combined EuroCommerce’s policy and sector knowledge with McKinsey’s global expertise and analytical rigor.
The Disruption and Uncertainty – State of Grocery Retail 2021 report, launched on 25 March 2021 by McKinsey & Company and EuroCommerce, takes a comprehensive look at the long term-trends and effects of the pandemic on the European grocery industry.
The report first recaps the industry developments in 2020 – it looks at how the COVID-19 pandemic has reshaped the European grocery landscape at unprecedented speed and scale, with government restrictions impacting shopping patterns and accelerating a dramatic shift to online.
Disruption and Uncertainty – State of Grocery Retail 2021, based on both the CEO survey and consumer research, identified four key trends that will shape the industry over the next years. These are based on the areas consumers intend to spend more money on and what CEOs see as the key industry-shaping trends, with the majority expecting an increased focus on adjusting to shoppers who want variety, value and online.