Northern and Eastern Europe Lead European Retail Growth
Northern and Eastern Europe lead European retail growth, outpacing Western counterparts as consumer spending habits shift toward services and experiences.
EU retail turnover expansion cooled to 2.1% in 2025, continuing a downward trajectory from the post-pandemic highs of 5.5% in 2023 and 3.0% in 2024, according to the latest data from Nielsen IQ (NIQ). Northern and Eastern Europe saw robust revenue gains, headed by Norway (+13.1%), Lithuania (+10.5%), Sweden (+8.9%), Bulgaria (+8.2%) and Slovakia (+8.0%).
However, stagnation in major Western European economies dragged down the overall performance, with retail turnover in the UK dropping by 0.6%. The average per-capita purchasing power across the 27 EU member states rose by 3.3% in 2025, to reach €22,425, creating a collective pool of approximately €10.1 trillion for household expenditure.
This economic divergence creates a challenging environment for traditional brick-and-mortar operations. The shift in consumer behavior suggests that simply increasing foot traffic is no longer a reliable metric for success, as the share of retail in overall private consumption continues to decline.
Momentum Shifts Eastward
Real momentum has shifted eastward. Central and Eastern European nations led spending power gains, especially Poland (+8.8%), Lithuania (+8.3%), Romania (+7.7%) and Bulgaria (+7.3%).
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For the fourth straight year, retail’s share of overall private consumption fell across the EU, dropping to 31.9% in 2025. Households increasingly prioritised discretionary services, hospitality and travel over physical goods.
Regional reliance on physical retail varies sharply, with Croatia having the highest retail share, at 48.3%, followed by Lithuania (45.7%), Bulgaria (44.0%) and Hungary (43.2%), while Germany had the lowest retail share, at just 22.2%.
Inflationary pressures remain a concern. EU headline inflation moderated to an average of 2.5% in 2025, driven by low rates in economies like France (0.9%). Meanwhile, Eastern European nations faced persistent pressures, with Romania leading the region with a 6.8% inflation rate.
Projections for 2026 indicate that EU inflation will tick up to 3.1%, driven primarily by fresh volatility across international energy markets. Philipp Willroth, study lead, NIQ Geomarketing, commented, “The key finding is not that Europeans are spending less, but that they are spending differently. Retail turnover continues to grow, yet an increasing share of consumer budgets is flowing into services and experiences. This points to a structural shift in spending priorities across Europe.”
