Retail

Retail is the largest industrial ecosystem, accounting for 11.5% of EU value added. It is also the largest private employer in the EU economy, employing nearly 30 million people.

The ecosystem comprises 5.5 million companies, with 99% of them being small and medium-sized enterprises (SMEs). With a gross value added of over €1.4 billion, the retail ecosystem generates the highest value among all industrial ecosystems.

The retail ecosystem encompasses various sectors, including grocery and non-grocery retail, wholesale, and online platforms. It is closely interconnected with manufacturers, importers, packaging, transportation and logistics service providers, postal and courier service providers, fulfilment centres, marketing, financial and payment services, and retail real estate.

Serving 450 million EU consumers on a daily basis, the retail ecosystem plays a crucial role in the distribution of products. On average, consumers spend one third of their household budget in retail shops.

The retail ecosystem exhibits different business models, such as integrated chains, franchise systems, groups of independent retailers, cooperatives and independent SMEs. Sales channels range from physical shops to multi-channel and omni-channel players, pure online players, and marketplaces.

Retail’s strongest links are with the agri-food, textiles, tourism, and social economy ecosystems, although it is interconnected with the majority of industrial ecosystems. Digital technology has thoroughly transformed the retail sector. It transformed the way retailers operate, including the way they interact with other economic operators, but more fundamentally it changed the relationship between retailers and consumers. Multi-channel retailing, combining physical shops with online services and offering innovative delivery solutions is now a commonly found business model.

The ecosystem is also striving for sustainability; however, economic uncertainties have hindered its ability to make necessary investments in the green and digital transition. The retail ecosystem has faced challenges due to the COVID-19 pandemic, the Russian invasion of Ukraine, energy crises, inflation, and shrinking consumer purchasing power. These factors, coupled with the growth of online retail and new business models, have significantly impacted purchasing patterns, particularly affecting small retailers and city centres.

Latest

European Capitals of Small Retail
The European Capitals of Small Retail kick off! This project has its roots in a citizens’ petition to the European Parliament, proposing to create an award for cities that excel in small retail revitalisation and city centre attractiveness. The call for tenders to identify the external contractor who will organise the competition is now open and the deadline for applications is 18 November 2024, 10:00 (CET).

Transition pathway for a more resilient, digital and green retail ecosystem
Following a co-creation process with a broad community of stakeholders, the retail transition pathway was launched at a high-level conference on 12 March 2024.

Study on the twin transition of SME retailers
As part of the #Revitalise Retail initiative, we published a study in June 2024 that examines the drivers and barriers of the green and digital transition for SME retailers. The study features 20 success stories of small shop owners who successfully transformed their business models to meet evolving consumer preferences.

Update of the Retail Restrictiveness Indicator (RRI) - 2022
The 2022 update of the RRI, first published with the 2018 retail communication, is available in the dedicated online dashboard.

Territorial supply constraints in the EU
In November 2020 we published the results of a study on territorial supply constraints (TSCs) in EU retail. The conclusions of the December 2020 workshop we held on possible ways forward are available.

#Revitalise Retail
The 'Revitalising retail guide' can inspire initiatives to support SME retailers. You can also read more about the Revitalising Retail 2020 workshops, their conclusions and some stakeholder views.

Best practices for retail establishment and operations

The retail sector is undergoing a dramatic transformation due to the rapid development of e-commerce. However, in many EU countries the regulatory framework was put in place decades ago and has not been adapted to the digital age. In the 2015 Single Market Strategy the Commission announced it would look at restrictions in the retail sector and identify best practices for facilitating retail establishment and reducing operational restrictions. With this set of best practices, adopted on 19 April 2018, the EU provides guidance for EU countries’ efforts to create a more open, integrated and competitive retail market.

The Commission has also developed and published the communication, the 'Retail Restrictiveness Indicator' (RRI) to provide a useful snapshot of the state of play in EU countries. The indicator is a dynamic monitoring tool to measure authorities' efforts to reduce retail restrictions in EU countries, and the impact of such reforms on market performance. The Joint Research Centre (JRC) Competence Centre on Composite Indicators and Scoreboards (COIN) carried out a statistical assessment of the indicator's framework.

The Commission followed up the communication with a high-level conference, 'a European retail sector fit for the 21st century' on 19 June 2018, and organised 4 workshops in 2019 in Brussels, Madrid, Vienna and Bucharest to promote the 'Guide for revitalising and modernising the small retail sector' (see below).

Supporting information

A series of external analyses contracted by the Commission provided information on retail in EU countries.

The Commission has engaged in discussions with the stakeholders directly concerned, including retailers, retail associations, representatives of civil society and EU countries. In addition to the public consultation on retail regulations in a multi-channel environment that ran in 2017, the Commission organised workshops on retail establishment restrictions in July and December 2014 and on operational restrictions in July 2016 and May 2017. EU countries were also consulted through meetings of the Services Directive Expert Group.

#Revitalise Retail

As the number of vacant shops continues to rise, preserving the vibrancy of city centres is a legitimate concern for national, regional and local authorities. In its 2018 'Guide for revitalising and modernising the small retail sector' the Commission identified positive examples throughout the EU of strategies going beyond retail to attract both individuals and small or large retailers back to city centres. These examples can serve as inspiration for authorities striving to achieve their urban development objectives.

The publication of this guide resulted from a 2017 study aimed at devising solutions and creating a practical guide for local authorities.

In a rapidly evolving economy, SME retailers may struggle to embrace green and digital transitions. In June 2024, the Commission published a study on the twin transition of SME retailers, analysing the drivers and barriers they face. The study includes a compendium of success stories of 20 SMEs across 16 EU countries, highlighting their adaptation to changing consumer preferences. Each story offers insights into the retailers' journeys toward green and/or digital transformation.

Workshops on the guide for revitalising and modernising the small retail sector

To follow-up on the 2018 'Guide for revitalising and modernising the small retail sector’ and foster the exchange of best practices about the green and digital transformation of small retailers, the Commission organises Revitalise Retail workshops.