Inflation, geopolitical tensions and demographic changes shaped the economy in 2024 and influenced consumption behavior and dynamics in retail – a trend that also stops in 2025. The “Retail Europe 2024 and 2025” study by GfK Geomarketing GmbH dealt with the most important retail indicators in Europe.
The stagnation of Western European economies such as Germany and France (or a slight decline in Austria) faces strong economic growth in South and Eastern European countries such as Bulgaria, Croatia, Romania and Slovakia.
Despite these differences, the labor market was “surprisingly robust” in 2024, according to the study. “Nevertheless, weak productivity growth and demographic changes – due to the retirement of the baby boomers and a decreasing internal European migration – represent long -term challenges.” Germany, for example, recorded a negative migration balance within the EU last year. What does this mean for purchasing power, retail sales and its share in private consumption? And are there generation -related differences?
“The retail trade remains a central part of consumption in the EU, even if its share decides. The consumer has remained fragile since the pandemic, since many Europeans are concerned about the economic situation of their country. Inflation, increasing living costs and climate change are among the greatest concerns and lead to more cautious output behavior,” summarizes Philipp Willroth from NIQ geomarketing.
Purchasing power
Even if purchasing power 2024 continued to increase across Europe, this happened significantly slower than in the two previous years. The average per capita buyer in the EU was around 21,000 euros, which corresponds to a nominal increase of 3 percent compared to the revised figures of 2023. Austria and Germany are over 29,000 euros or 27,700 euros above average. However, regional differences in purchasing strength are significant: While purchasing power in parts of Sylt is up to 68,400 euros per person, it is only around 13,700 euros in parts of Dortmund. The residents had a total of around 9.5 trillion euros for expenses inside the 27 EU member states.
Retail turnover
After a significant increase of 5.5 percent in 2023, the growth of retail sales in the EU slowed down to 3 percent last year. The strongest growth were recorded in Eastern Europe, supported by strong real wage growth. In Romania, retail sales increased by 14.9 percent, with particularly high growth in clothing, shoes and electronics, or around 10 percent in Bulgaria, Bosnia and Herzegovina, Poland and Slovakia.
With 2.9 percent and 2.7 percent, Germany and Austria are just below average, while Switzerland almost stagnated with 0.7 percent. In Estonia there was a decline of 1.3 percent due to political uncertainties and increasing consumers: inner skepticism.
Retail
Even if retail remains a central component of private consumption, the proportion of consumption expenditure in the EU that flows into retail has decreased continuously for three years; In 2024, just under a third (32.6 percent) of the entire private consumption were eliminated. Croatia is at the top with a share of 48 percent, while Germany forms the bottom with a quarter (25.1 percent).
The Germans also spend only 8.1 percent of their retail budget for clothing and shoes and instead lead to expenses for sporting goods, hobby, leisure and home improvement (10.6 percent), for example with 7.3 percent in Switzerland. Croatian consumer: on the other hand, a strong preference for fashion (13.9 percent) shows.
“Many Europeans: Interior is concerned about the economic future of their country – inflation, increasing cost of living and climate change are among the greatest challenges. In contrast, technological change – in particular the rise of artificial intelligence – is evident positively. This growing confidence, paired with a declining inflation, could help stabilize the consumption climate To revive from generation Z and millennials in Europe, ”estimates the study.
After severe price increases in previous years, inflation in the EU showed further signs of stabilization in 2024 and was on average 2.6 percent. Romania recorded the highest inflation rate with 5.8 percent, followed by Belgium (4.3 percent) and Hungary (4 percent). Germany and Austria are in midfield with 2.5 and 2.9 percent, while Switzerland and Lithuania have the lowest inflation rate at 0.9 percent. The EU-wide forecast is 2.3 percent for 2025.
Generation -specific consumption
There are generational differences in consumption behavior: Generation X (44–59 years) has the highest purchasing power and is relatively open to new products. Millennials (28–43 years) prefer experiences at home, such as cooking and entertainment, which has been reinforced by pandemic. Generation Z (under 28 years) is very convenient -oriented and baby boomers (60+) remain the most cautious consumers: inside: They prefer to use their own brands, concentrate on basic needs and often buy offers. Younger generations are looking for better offers online, with millennials using online platforms or apps.
The regional age distribution within Europe and within the individual countries clearly correlates with differences in online affinity and digital buying behavior. In Germany, for example, cities such as Munich, Düsseldorf and Regensburg also have the highest online affinity with the youngest households in the country.
“Baby boomers, who often live in suburbs and whose children have already moved out, show rather conservative output behavior. Millennials and Generation X are mostly in active family phases, with needs that are strongly shaped by family life and lack of time. Generation Z is particularly convenient -oriented,” summarizes the study.
Use for retail
Retailers: Inside, you can use these findings by designing your customer: in accordance with the internal approach, for example through mobile apps for millennials, fashion campaigns with influencers: inside for generation Z and sustainability messages directly at the sales outlets for young, value -oriented consumers.
“To understand where and how different generations shop is crucial for the optimization of the assortment, marketing strategies and the overall performance of branches in a diverse and changing European retail environment,” concludes the study.