The State of Grocery Retail Europe 2026: Margins under pressure, models in motion (Ecommerce Europe and EuroCommerce)

Summary

• European grocery sales grew by 3.4% in 2025, driven by 2.9% food price inflation and 0.6% volume growth.p.9
• Private label share reached 40.0% of total sales in 2025 and discounters reached 22.4%.p.9
• SG&A reached 19.7% of revenue in 2025, up from 19.0% in 2022 across nine major European retailers.p.18
• Grocery M&A reached 28 transactions in 2025, up from 19 deals in 2022, an increase of 47%.p.20
• Online grocery sales in Europe grew by 6.8% between 2024 and 2025, down from 7.8% the year before.p.17

Key insights

1. Volume is projected to grow only approximately 0.2% CAGR through 2030, so inflation remains the main driver of market growth.p.19
2. Foodservice is growing at 6.8% CAGR between 2022 and 2025, compared with 4.8% for grocery.p.16
3. Private labels account for 44% of total innovation activity in Western Europe and as much as 70% for food categories.p.21
4. An estimated $3 trillion to $5 trillion of global B2C retail spending could be performed by AI agents by 2030.p.25
5. 40 to 50 percent of routine activities in grocery headquarters could be automated by AI agents.p.26
6. Labor costs rose 5.1% on average across Europe, compared with 4.0% food inflation.p.18
7. The share of shoppers actively seeking ways to save money decreased from 55% in 2023 to 46% in 2026.p.15
8. Enterprise IT technology expenses increased at 8% annually between 2021 and 2025, close to double the industry growth rate.p.28