Circana's biannual study assesses the biggest consumer buying trends across the six largest grocery markets in Europe, taking into account 230 CPG categories with 2,000 product segments. This latest report depicts a varied picture across the continent, with unit sales growing by 0.3% despite slow demand in key Northern European markets.
The FMCG sector has climbed by 4.4% over the last year, reaching a value of €67bn, up from €636bn in 2024 (for the 12 months to end of June 2024 vs. previous 12-month period).
This growth across EMEA markets is being driven by strong performances in Spain and Italy, where domestic consumption and a favourable investment climate are speeding up recovery.
Meanwhile, the UK, Germany and France are witnessing slower recoveries, stilted by economic volatility and tactical retail responses.
“While Southern Europe has shown resilience, the overall market recovery is uneven,” Ananda Roy, global SVP, strategic growth insights for Circana explained. “Spain and Italy are showing significant momentum, but the UK, France, and Germany remain laggards.”
Private label growth opportunities
In terms of category, the growth across Europe is being pushed by private labels. These now claim a 39.2% value share – worth €263bn. This has increased by 0.5% from 2023.
Momentum for private label is expected to slow in 2025; however, Circana’s analysis shows that opportunities remain for brands operating prudently in this segment.
According to the insights firm, brands can remain competitive by focusing on innovation at scale and optimising their range and assortment beyond promotions. Strategic collaborations, limited editions, category growth and premiumisation will all offer avenues for brands to reinforce their value proposition.
A shift in the retail landscape
Supermarkets and hypermarkets continue to dominate the grocery landscape, with a 71% share. However, Circana’s findings reveal that hypermarkets are struggling to adapt to changing consumer preferences, which is resulting in declining discretionary sales across channels.
Meanwhile, convenience stores and discounters remain as favourable destinations for essentials.
Outlook for 2025
Looking ahead, challenges will continue to push back on sustained FMCG growth, with high prices, volatility, and uneven demand adding pressure.
Macroeconomic factors driven by geopolitical instability, volatile commodity prices, high interest rates, and wage growth will continue to weigh down the sector.
“The business environment remains highly constrained,” explained Roy. “A balance of macroeconomic factors is introducing new risks that continue to challenge the FMCG sector.”
In other news, the Competitions and Markets Authority has set a deadline for its investigation into the acquisition of two feed mills owned by ForFarmers UK by 2 Sister's owner.
