Grocery sales in Europe grew 3.4 percent in 2025, driven mainly by moderate food price inflation, while sustained cost pressure kept EBIT margins flat at 2.8 percent for a second consecutive year. Private label continued to gain ground, reaching a 40 percent value share across the EU-11, and discounters expanded their market share to 22.4 percent. Looking to 2026, grocery CEOs are more polarised in their outlook than in previous years, with sentiment varying sharply by region: Northern European executives are considerably more optimistic than their counterparts in Western and Central and Eastern Europe.

The report identifies eight structural trends shaping the sector, including a growing divergence between price-conscious and premium-seeking consumer segments, accelerating growth in foodservice and ready-to-eat products relative to traditional grocery, and increasing merger and acquisition activity as retailers pursue scale advantages. It also highlights that footprint expansion no longer delivers meaningful growth, pushing grocers toward adjacencies such as retail media, which is described as the most scalable profit pool beyond the core business.

A significant share of the report addresses artificial intelligence: while 47 percent of surveyed CEOs rank AI and automation among their top three priorities for 2026, 70 percent report no measurable EBIT impact from AI so far, and no retailer surveyed has achieved full enterprise-wide AI deployment. The report frames this gap between strategic priority and realised value as the central challenge for the sector going into 2026, alongside persistent structural cost inflation, particularly in labour costs, which are outpacing food price inflation across most European markets.

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