The State of Grocery Retail Europe 2026

For the European grocery sector, 2025 was a year of stabilisation. Compared to 2024, shoppers’ spending patterns remained largely unchanged,  while grocers continued to contend with cost pressure. In early 2026, 64 per cent of grocery  CEOs anticipate that market conditions will improve or remain similar compared to 2025.

Nevertheless, the environment is still challenging. Margin pressure remains the primary concern,  competition stays intense, and growth prospects continue to look muted in the medium term. Looking ahead to 2026, grocery executives face  both opportunities and challenges. As input costs showed early signs of easing at the beginning of  2026, how will grocers respond to the challenges posed by ongoing geopolitical disruptions? What is the right balance between recovering margins and delivering value to shoppers? And how can grocers use data, AI, and technology to drive measurable business impact—especially as agentic AI is beginning to reshape the way consumers shop and grocers run their business?

Recent developments in early 2026, including escalating tensions in the Middle East, occurred after the analysis underpinning this report and therefore are not reflected in the report. While we believe most trends will hold up despite these developments, inflation might be higher and consumer sentiment worse in 2026 than we anticipated.

This report builds on a rich fact base. We surveyed over 35 grocery executives and more than 15,000 consumers across 14 European countries. We also analysed market data and grocers’ corporate moves in these countries. All research on which this report is based was conducted in early 2026.

To take into account the rapidly growing relevance of AI, this year’s report highlights four AI opportunities that we believe will define the midterm future of grocery retail: embracing agentic commerce, rewiring the organisation with agentic AI, taking store automation to the next  level with physical AI, and ensuring sufficient returns on technology investments.

Once again, we have combined EuroCommerce’s policy and sector knowledge with McKinsey’s global expertise and analytical rigour. We hope his report offers actionable insights and perspectives to help European grocers navigate ongoing uncertainty and seize the most attractive pockets of growth.