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
Territorial supply constraints in the EU
A call for evidence on territorial supply constraints (TSCs) was published on 5 March. A public consultation will follow at a later stage.
European Capitals of Small Retail
Barcelona (Spain), Caldas da Rainha (Portugal) and Silandro/Schlanders (Italy) have been awarded the title of European Capitals of Small Retail 2026 for large, medium-sized and small cities respectively. This originates from a citizens’ petition to the European Parliament, proposing an award for cities that excel in small retail revitalisation and city-centre attractiveness. Check the initiative’s website for more information.
#Revitalise Retail
Read the report of the first phase of the joint OECD/European Commission project on the twin transition of retail SMEs in urban and rural areas ‘Local Retail, Global Trends’ to discover how small retailers are embracing the green and digital transition and how policies at national, regional and local level can support their competitiveness.
Transition pathway stakeholder support platform for the retail ecosystem
Join the retail ecosystem stakeholder platform created to support the co-implementation of the retail transition pathway to
- stay informed about EU policies, legislation, news and events related to the retail ecosystem
- submit pledges, commitments and best practices
- draw inspiration from best practices and initiatives shared by other stakeholders
- collaborate and discuss initiatives in dedicated workspaces and forums.
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.
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
Territorial supply constraints are practices by certain large manufacturers that restrict retailers or wholesalers from purchasing goods in one EU country and reselling them in another. These barriers may limit consumer choice and contribute to significant price differences for daily consumer goods across the EU.
The Single Market Strategy, adopted on 21 May 2025, identifies territorial supply constraints in retail and wholesale as one of the ‘Terrible Ten’ most harmful barriers to the Single Market. In the strategy, the Commission announced that it will develop tools to address unjustified territorial supply constraints in cases not covered by competition law.
As part of the consultation process, the call for evidence invites stakeholders – including public authorities, businesses, consumers, civil society, social partners, and academia – to share their views and experiences. The feedback received will inform the impact assessment analysing possible policy options.
Stakeholders can submit their contributions via the Have your say portal. The public consultation will be launched at a later stage.
The process builds on information gathered through
- a fact-finding exercise carried out with EU countries in the Single Market Enforcement Taskforce between 2024 and 2025
- a stakeholder dialogue held on 7 April 2025.
In 2020, the results of a study on territorial supply constraints (TSCs) in EU retail were published.
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 that it would review restrictions in the retail sector and identify best practices to facilitate retail establishment and reduce operational restrictions.
In April 2018, the Commission adopted a set of best practices to support EU countries in creating a more open, integrated and competitive retail market.
Related documents
- Communication, 'A European retail sector fit for the 21st century'
- Staff working document with underpinning evidence, accompanying the communication on the retail sector (PDF, 3MB)
- Staff working document, 'Public consultation on retail regulations in a multi-channel environment synopsis report', (PDF, 643KB)
- Press release: Strengthening the competitiveness of the European retail sector
- Factsheet: Strengthening the competitiveness of the European retail sector
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. 4 workshops were also held 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.
- Study on retail establishment in the EU: restrictions and freedom of establishment
- Study on retail operational restrictions
- Mini-study: Store-based retail market openness: Measuring cross-border operations and investment
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
In a rapidly evolving economy, retail SMEs may struggle to embrace green and digital transitions. Small retailers are vital to local economies, creating vibrant neighbourhoods, preserving cultural identity, and building economic resilience through their close links with local businesses and consumers.
In 2026, the OECD published the report ‘Local Retail, Global Trends’, as part of a joint OECD-European Commission project on the twin transition of retail SMEs in urban and rural areas. The report analyses how small retailers are embracing the green and digital transition and how policies at national, regional and local level can support their competitiveness.
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.
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.
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 organised Revitalise Retail workshops.