The European grocery sector in 2024 marked a turning point after several turbulent years. According to McKinsey’s “The State of Grocery Retail Europe 2025” report, sales grew by 2.4%, driven mainly by 2.3% food price inflation, a modest 0.2% volume growth, and a downtrading effect of –0.1%.
For the first time since 2020, sales increased in real terms, although they remained 4.1% below 2019 levels. This gap reflected the combined effect of a 0.8% increase in volume and a 4.9% decline in the real price per item.
The Rise of Discounters and Private Labels
The McKinsey report highlights that discounters and private labels continued their steady advance across the continent. Between 2019 and 2023, discounters captured 2.4 percent points of additional market share, with a further 0.2 percentage point gain in 2024, reaching 23.2%.
Private labels followed a similar trajectory, expanding by 3.8 percentage points in volume over the same four-year period and by 0.3 percentage points in 2024 alone. When examining more than 127 grocery banners across 11 European countries, McKinsey found that about 31% qualified as growth champions, outperforming peers by combining market share gains with above-market sales growth.
Discounters were overrepresented among these champions, with 41% achieving this status compared to 28% of supermarkets and hypermarkets. On average, champions were 35 to 50% larger than competitors, generated 0.8 percentage points higher EBITDA, and achieved double the sales growth and five times the sales productivity growth. Four practices stood out as common across winning players: maintaining a high share of private labels, providing a pleasant in-store experience, ensuring excellent product quality, and offering consistently low prices.
Looking ahead, the McKinsey report suggests that the grocery retail industry will face low volume growth—around 0.2% annually across Europe until 2030. Regional differences will shape outcomes, with Northern and Southern Europe expected to grow at 0.4 to 0.5% annually, Western Europe seeing minimal growth at 0.1%, and Central and Eastern Europe experiencing a decline of –0.3% per year.
Channels such as online grocery and discounters are projected to capture above-average growth, while categories like fresh, healthy, functional, and convenience foods are poised to become key growth pockets. Private labels, which already account for 39.1% of grocery sales in Europe, are expected to climb further to between 40 and 42% by 2030.
McKinsey’s consumer surveys reveal that 84% of shoppers will continue buying private labels even if their purchasing power improves, with 81% rating their quality as comparable or superior to branded products. Retailers who build private brands with distinct category-specific identities stand to gain significant competitive advantage. Health and nutrition trends are also reshaping consumer behavior.
McKinsey’s 2025 survey shows a two-percentage-point rise in net intent to buy more fresh, high-quality products, with Gen Z leading this shift. About 45% of Gen Z shoppers prioritize healthy nutrition, seven percentage points higher than in 2024, and one in three is willing to pay a premium for healthier options. By contrast, baby boomers focus more on reducing salt and processed foods, reflecting different generational priorities.
At the same time, the rise of the so-called no-cooking generation creates new dynamics. Foodservice has been growing faster than grocery, with turnover increasing 4.4% annually between 2023 and 2024, compared to 2.8% for modern grocery.
Ready-to-eat and ready-to-heat meals are gaining popularity, with 54% of consumers buying them at least monthly. Gen Z and millennials are the main drivers of this trend: 77% of Gen Z and 72% of millennials purchase food-to-go every month, and 42% of Gen Z buy ready-to-eat meals weekly.
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