News & Insights

Consumers in Europe are stabilising, looking less to save on money but are more willing to trade up, and at premiumisation, according to The State of Grocery Retail 2026.

But, as Christel Delberghe, Director General of EuroCommerce, stressed, the survey was held before the Iran conflict began, so the situation “remains fragile”.

“The report, authored by McKinsey, also generational differences, with the younger looking more into health and sustainability, plus a general trend towards convenience, with foodservice outpacing retail, offering opportunities for ready to eat,” she said.

“Online growth remains quite strong but with strong country variations. Meanwhile, private labels have been growing over recent years and this is continuing, coming across as a strong opportunity to differentiate from main brands,” she added. “Innovation in private labels is no longer there as a competitor but for anticipating consumer demand for sustainability, health, premiumisation and wellness.”

Alexandre Kleis, Partner, McKinsey & Company added that persistent structural high costs in the industry have remained a stubborn issue.

“Growth has been quite muted in many segments, but there will be other opportunities going forwards. Structural costs have continued to grow, despite attempts at cost reduction. Growth is also a challenge, with the forecast to 2030 only about 0.2%, so a challenging environment,” he reflected.

Some areas, such as retail media, discounters and private label have been areas for development, he added, while he said that the hypermarket format is under challenge in a number of European markets, as are non-food categories.

Looking to AI, he said: “Agents will help merchants spend more time on strategic tasks.”