Circana, a leading advisor on the complexity of consumer behaviour, today launched its latest biannual FMCG Demand Signals study of the biggest consumer buying trends across the six largest grocery markets in Europe (across 230 CPG categories with 2,000 product segments). The analysis reveals a complex recovery phase as unit sales grow by 0.3%, despite sluggish demand in key Northern European markets. The FMCG sector has climbed by 4.4% over the last year, reaching a value of €673 billion, up from €636 billion in 2024 (for the 12 months to end of June 2024 compared to the previous 12 month period).
According to the findings, FMCG growth across EMEA markets is being buoyed by strong performances in Spain and Italy, where domestic consumption and a favourable investment climate are accelerating recovery. Conversely, the UK, Germany, and France continue to experience slower recoveries, impacted by economic volatility and tactical retailer actions that are contributing to a patchwork recovery across the region.
“While Southern Europe has shown resilience, the overall market recovery is uneven,” comments Ananda Roy, Global SVP, Strategic Growth Insights, Circana. “Spain and Italy are showing significant momentum, but the UK, France, and Germany remain laggards.”
The silent march of private labels
Category-wise, growth is largely driven by private labels, which now holds a 39.2% value share (worth €263bn), up 0.5 percentage points on 2023 figures. Across the continent, private label strength continues to reshape competitive dynamics, with opportunities for growth for traditional brands still evident. Edible and non-edible categories alike are feeling the impact as retailers innovate, improve quality, and emphasize sustainability and availability, which are core to private label transformation.
While private label momentum is expected to slow in 2025, Circana’s analysis explains that brands can remain competitive by focusing on innovation at scale and optimising their range and assortment beyond promotions. Strategic collaborations, limited editions, category growth, and premiumisation offer avenues for brands to reinforce their value proposition. There are strong growth prospects for brands that can leverage these strategies, especially in adjacencies and emerging premium segments.
Retail landscape shifts as competition intensifies
As competition intensifies across channels, supermarkets and hypermarkets continue to dominate grocery sales, capturing 71% of the market. Hypermarkets are struggling to adapt to changing consumer preferences, resulting in uniformly declining discretionary sales across channels.
Convenience stores and discounters are continuing to be favourable destinations for essentials.
Outlook for 2025: Balancing growth and volatility
Looking ahead, the forecast for 2025 suggests that sustained growth in FMCG will face challenges as high prices, volatility, and uneven demand weigh on sustainable unit and volume growth. Macroeconomic factors continue to exert pressure, driven by geopolitical instability, volatile commodity prices, high interest rates, and wage growth. “The business environment remains highly constrained,” explains Roy. “A balance of macroeconomic factors is introducing new risks that continue to challenge the FMCG sector.
“Value sales are expected to be largely inflation-driven, as volume sales remain sluggish due to factors such as rising unemployment risks, more conscious consumption, and constrained affordability. While demand in EMEA’s edible categories shows signs of recovery, significant volatility across key growth drivers leaves doubt over the sustainability of the momentum into 2025. The soft recovery in the food and beverage sector highlights the challenges the FMCG industry faces in achieving long-term growth amidst ongoing uncertainty.”
