There are eight trends that will characterize the European grocery retail market in 2023.
Retail prices take up to 12 months to follow commodity price evolution. Commodity prices peaked in Q3 2022, so volume decline should halt as prices normalize in H2 2023.
Gradual normalization of price and volume
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A focus on cheaper food through private labels and discounters
84% of respondents rate private labels similar to or higher in quality compared to branded products.
Continued margin and cost pressure
88% of surveyed European C-suite exec(utive)s named margin pressure a top trend for 2023.
A race for economies of scale
53% of consumers look for ways to save money when shopping, up from 41% in 2022. This increases the need for economies of scale.
The quest for profitable online growth
~75% of UK customers shop online sometimes or always with a different banner than offline.
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Retail media as a core profit center
+€11 billion additional annual media spend will go into retail media by 2025.
Systematic scaling of automation and technology
1+ p.p. total EBIT margin improvement potential of use-cases in automation, technology and advanced analytics, including Generative AI.
Supplier collaboration to solve for sustainability
~50% of value cain emissions of grocers are in the meat and dairy categories.
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