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How will Covid-19 affect European retail?

What will European grocery retail look like by 2022? Expert analysts from IGD reveal the key trends to watch out for

How will Covid-19 affect European retail?

Retailers across Europe have added new delivery options (Photo: Albert Heijn, Yasmin Hargreaves)

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The Covid-19 pandemic has accelerated existing trends and channel shifts across Europe. Lockdown measures implemented in most countries have had an immediate impact on grocery retailing.

Click here to register for IGD's EUropean Channel Forecasts Webinar

With most countries having experienced some style of lockdown, shoppers have been driven online and some of this shift is expected to remain. However, amongst physical channels, the changes seen have been more nuanced by country, with some of these expected to be boosted further as the economic impact of the pandemic begins to be felt by shoppers.

1. Online gained strongly from lockdown
While grocery ecommerce was a trend across Europe, its impact or importance was not the same across the region. The pandemic has changed this. In most markets, there has been a significant increase in demand for online grocery services as shoppers look for safe and convenient ways to complete their purchases. To meet this demand, retailers and manufacturers have worked hard and quickly to increase their capacity, often adding new, often faster, delivery options in the process.

2. Discount struggled, but set to benefit in medium term
With many discounters not operating online, the channel’s retailers did not make the same gains as those enjoyed by others as demand increased, out of home meals and more occasions shifted into peoples’ homes. The channel, though, has performed well since the worst of the lockdowns and is expected to do well in the medium term as shoppers look to save money. Elsewhere, a focus on low prices, the expansion of ecommerce and digital solutions and on-going investment in sustainable initiatives, amongst other developments, are likely to help the retailers attract new shoppers.

3. Other channels innovating to compete
Outside the two leading growth channels, hypermarkets, supermarkets, and convenience stores have faced a mixed performance, with differences being seen across the region. While proximity formats have performed well in Italy and Spain, elsewhere hypermarkets and large stores, such as in Sweden, have won as shoppers looked to consolidate their purchases into as few trips as possible.

While these differences exist, retailers have continued to invest in their stores, not only to make them safe for shoppers and staff alike, but also as they look to future proof them for when their markets return to something more like normality.

Join IGD analysts on 25 November at 10am (CET) to hear the latest IGD European channel forecasts brought to life. The webinar will look at these developments alongside three key channel trends.

Click here to register for IGD's EUropean Channel Forecasts Webinar

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