This article contains:
Key insights
- Rising costs and fierce competition have driven a wave of retail bankruptcies, particularly in the non-food segment.
- Omnichannel strategies, combining online and in-store experiences, are essential for growth as consumer confidence remains fragile.
- Retailers must invest in green logistics, technology, and AI to enhance efficiency and meet growing consumer and regulatory demands.
European perspective
We also see this uneven development elsewhere in Europe. Germany and Italy lag behind, France and Spain show slight growth for this year (around 1.5%). European consumer confidence is rising slightly. High savings rates (15% in Belgium, 16% in the Netherlands and 20% in Germany) and inflation are dampening spending. After construction, retail is the sector with the most bankruptcies.
Profitability in the industry globally is under pressure from high inventory levels, high operating costs and consumers who are reluctant. Many retailers have been forced to offer aggressive discounts to reduce inventories and free up working capital. Price competition is especially fierce in essential categories such as food and personal care.
Overall, the European retail market shows moderate growth in 2024. The challenges for the coming period are great (both food and non-food). Cost control, innovation and sustainability are crucial to remain competitive in a market that is increasingly shifting toward e-commerce. Persistent staff shortages and rising rental and labor costs remain challenging.
Bankruptcies
2024 showed a marked increase in bankruptcies in the retail sector, especially in the non-food segment. The outlook for 2025 remains moderately positive, but a focus on efficiency and differentiation will be essential for retail companies that want to survive in this dynamic and demanding market. In 2025, the main focus for retailers will be on recovering their operating margins and finding balance between physical and digital sales channels. More and more retailers are deploying different sales channels, the so-called omnichannel approach combining physical store(s) as webshop(s) and after-sales. Customers value online convenience, as well as the in-store experience.
Investments in technology, customer experience and sustainability are the foundation for growth. Only companies that can adapt flexibly to changing market conditions and consumer expectations will be able to remain successful in the competitive and dynamic retail environment. Specialization and providing unique value to the customer are crucial.
Challenges and trends
Retailers have been dealing with rising costs (including rent, personnel and energy) for some time. Only less than a quarter of retailers can fully pass on these higher costs, with the rest having to make do with smaller margins. This poses a problem for many small to medium-sized businesses that have little financial room.
The number of bankruptcies within the retail sector is increasing (not only in 2024, also in 2025). Many small and medium-sized stores are struggling to survive. In addition, web shops that achieve only minimal turnover are vulnerable. Also at play is the growing competition from wholesalers who are increasingly selling directly to consumers.

Slight sales growth is expected in 2025, driven by recovering consumer behavior and more stable inflation. Although the economy is expected to stabilize, consumer confidence remains fragile and sensitive to economic fluctuations. The e-commerce sector is expected to remain the main driver.
Under pressure from high hiring and staffing costs, companies will invest in automation and technology to increase operational efficiency. Retailers that successfully use data analytics and AI can further optimize their business processes, giving them competitive advantage.
Sustainability remains a top priority for the industry. With stricter regulations and higher consumer expectations, more and more retailers will commit to green logistics, energy conservation and sustainable product offerings. However, this trend also means that companies face significant investments, which can be especially challenging for smaller retailers. Larger companies that invest in sustainability will emerge stronger from this transition, especially as sustainable products and environmentally friendly operations remain in demand by consumers.
The wave of bankruptcies in the non-food segment will continue into 2025. Consolidation within the sector continues, with larger retailers increasing their market share and taking over or displacing smaller players. In addition, the non-food sector continues to face pressure from changing consumer behavior.