Retail in Western Europe

October 2024

The retail industry has experienced its fair share of ups and downs over the 2018-2023 period, with the pandemic, and its lockdowns and non-essential store closures, benefiting some channels but negatively impacting others. This was followed by a couple of years of unprecedentedly high inflation rates, favouring retailers like discounters as many Western European consumers had to watch their spending, concentrating on more essential goods and looking for the best value for money.

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Key Findings

Discounters performing strongly

Discounters, already the leading grocery retailers channel in Germany, Western Europe's biggest retail market, overtook supermarkets to also assume this role in the Turkish market in 2023. Affordable prices, regular discounts and wide assortments, including their own private label lines, have helped Bim, A101 and Sok drive the discounters growth in the Turkish market.

Omnichannel approach increasingly important

Innovations such as click-and-collect services, seamless O2O customer journeys and personalised online recommendations based on in-store behaviour are becoming increasingly common in German retail. This convergence of digital and physical shopping experiences is enabling retailers to offer more cohesive and satisfying customer experiences, driving loyalty and sales across channels.

Investment in technology

Retailers are likely to invest more in technology, such as digital screens, virtual reality and augmented reality, to improve the customer experience. There will likely also be a push to introduce entertainment and leisure into the retail concept, while pop-up stores also offer opportunities for players to introduce new products, new concepts and new experiences.

Social commerce gaining ground

The rise of social commerce continues to be seen in the UK, boosted by Millennials and Gen Zers, with their generally high disposable incomes, given they spend greater time online on various digital devices. While Amazon Marketplace and Amazon continued to record positive sales growth in 2023, newcomer TikTok Shop Marketplace remained the most dynamic performer, once again recording triple-digit percentage growth.

Scope
Key findings
Western Europe home to the third biggest regional market for retail value sales
Positive growth expected for the Western European retail market from 2024
Western Europe has the highest regional per capita spend on vending
Non-grocery retailers struggle over the review period
Despite recent declines, e-commerce adds the most new sales over 2018-2023
Turkey the most dynamic country market in 2018-2023
High inflation continues to impact retail sales across Western European countries in 2023
Discounters now the leading grocery retailers channel in Turkey
Competitive landscapes generally becoming more concentrated
Amazon.com gains the most share over the 2018-2023 period
Lidl and Aldi expected to continue expanding
No movement among the top five brands in 2023
Positive growth expected throughout the forecast period for retail in Western Europe
The UK will go close to catching Germany in terms of retail sales over 2023-2028
Turkey will continue to see the most dynamic growth
Austria: Grocery Retailers Market Context
Austria: Non-Grocery Retailers Market Context
Austria: Competitive Landscape
Belgium: Grocery Retailers Market Context
Belgium: Non-Grocery Retailers Market Context
Belgium: Competitive Landscape
Denmark: Grocery Retailers Market Context
Denmark: Non-Grocery Retailers Market Context
Denmark: Competitive Landscape
Finland: Grocery Retailers Market Context
Finland: Non-Grocery Retailers Market Context
Finland: Competitive Landscape
France: Grocery Retailers Market Context
France: Non-Grocery Retailers Market Context
France: Competitive Landscape
Germany: Grocery Retailers Market Context
Germany: Non-Grocery Retailers Market Context
Germany: Competitive Landscape
Greece: Grocery Retailers Market Context
Greece: Non-Grocery Retailers Market Context
Greece: Competitive Landscape
Ireland: Grocery Retailers Market Context
Ireland: Non-Grocery Retailers Market Context
Ireland: Competitive Landscape
Italy: Grocery Retailers Market Context
Italy: Non-Grocery Retailers Market Context
Italy: Competitive Landscape
Netherlands: Grocery Retailers Market Context
Netherlands: Non-Grocery Retailers Market Context
Netherlands: Competitive Landscape
Norway: Grocery Retailers Market Context
Norway: Non-Grocery Retailers Market Context
Norway: Competitive Landscape
Portugal: Grocery Retailers Market Context
Portugal: Non-Grocery Retailers Market Context
Portugal: Competitive Landscape
Spain: Grocery Retailers Market Context
Spain: Non-Grocery Retailers Market Context
Spain: Competitive Landscape
Sweden: Grocery Retailers Market Context
Sweden: Non-Grocery Retailers Market Context
Sweden: Competitive Landscape
Switzerland: Grocery Retailers Market Context
Switzerland: Non-Grocery Retailers Market Context
Switzerland: Competitive Landscape
Turkey: Grocery Retailers Market Context
Turkey: Non-Grocery Retailers Market Context
Turkey: Competitive Landscape
UK: Grocery Retailers Market Context
UK: Non-Grocery Retailers Market Context
UK: Competitive Landscape

Retailing

Retail is the sale of new and used goods to consumers from a business for personal or household consumption from retail outlets, kiosks, market stalls, vending, direct selling and e-commerce. Retail is the aggregation of Retail Offline and Retail E-Commerce. Excludes specialist retailers of motor vehicles, motorcycles, vehicle parts. Also excludes fuel sales, foodservice sales, rental transactions, and wholesale sales (e.g. Cash and Carry). Sales value excluding or including VAT/Sales Tax. Retail also excludes the informal retail sector. Informal retailing is retail trade which is not declared to the tax authorities. Informal retailing encompasses (a) sales generated by unregistered and unlicensed retailers, i.e. retailers operating illegally, and (b) any proportion of sales generated by a registered and licensed retailer that is not declared to the tax authorities. Unregistered and unlicensed retailers operate predominantly (although not exclusively) as street hawkers or operate open market stalls, as these channels are harder for the authorities to monitor than permanent outlets. Activities in the illegal market, which is usually understood to refer to trade in illegal, counterfeit or stolen merchandise, are included within our definition of informal retailing. Activities in the “grey market”, which is usually understood to refer to trade in legal merchandise that is sold through unauthorized channels – for example cigarettes bought legally in another country, legally imported, but sold at lower prices than in authorized channels – will be included as informal retailing if no tax is paid on sale by the retailer. However if the retailer pays tax – for example on cigarettes bought legally in another country but sold at a lower price than standard – the sale is included within formal retail.

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