The ‘Transformation Imperative for Nongrocery Retailers’, a joint report by McKinsey & Company and EuroCommerce, provides an in-depth analysis of the changing dynamics within the European nongrocery retail sector. Drawing on survey data from over 15,000 consumers across six major European countries and interviews with 30 senior industry executives, the report offers a detailed view of developments across six categories: furniture and furnishings, DIY and hardware, consumer electronics, sporting goods, beauty and personal care, and pet care.

The report outlines key challenges, including macroeconomic headwinds, evolving consumer expectations, and increasing pressure to deliver on sustainability and omnichannel capabilities. Although nominal turnover grew by 2.3% per year from 2019 to 2023, real (inflation-adjusted) growth remained below 2019 levels, pointing to the need for strategic adaptation.

Opportunities identified include the continued expansion of online sales, increased interest in circular business models, and the development of complementary services. Senior executives interviewed for the report highlighted priorities such as enhancing omnichannel integration, building resilient business ecosystems, and improving operational efficiency.

The report concludes by outlining six strategic themes intended to support nongrocery retailers as they navigate a complex and evolving market landscape.