The report titled “The State of Grocery Retail 2025: Europe,” released today by McKinsey & Company and EuroCommerce, examines the retail sector in 2024 and notes a 3.5% increase in Portugal compared to 2023.
This growth was driven by an inflation rate of 2.4% and the selection of more expensive products by consumers, which rose by 2.3%, despite a 1.2% drop in sales volume.
In real terms, sales increased for the first time in three years, rising by 1.1%, “although they remain 2.1% below 2019 levels” (prior to the COVID-19 pandemic).
Across Europe, 2024 marked the first year since 2020 that real food retail prices increased.
Compared to 2019, the last full year before the pandemic disrupted supply chains, revenues in Europe grew by 26.3%.
Adjusted for inflation, sales are 4.1% below what was recorded in 2019.
The report’s authors note that 2024 “was a challenging year for European retailers,” with ongoing economic pressure leading to “cautious consumer behavior and widespread spending restraint.”
Similarly, discount stores and private labels continued to gain market share, albeit at a slower pace than in 2023.
The document was prepared based on interviews with four CEOs from the sector and surveys of more than 30 European business leaders and over 14,000 consumers across 13 European countries.
The forecast for 2025 indicates that volume growth is expected to “remain low” and continue as such through 2030.
The focus for food retailers should shift towards capturing growth opportunities and laying the groundwork for future advancements, with industry leaders expressing more optimism than a year earlier.
By 2025, it is anticipated that there will be an increase in private label differentiation (which should capture more market share), a higher demand for healthy foods, and personalization becoming a new standard of customer relations, particularly through the use of artificial intelligence.
