Retail’s Share of EU Spending Falls for the Fourth Consecutive Year

The proportion of private consumption allocated to retail continues to see a downward trend across the European Union as consumers prioritize spending on services, leisure, and other non-retail sectors. According to data from NielsenIQ, retail accounted for only 31.9 percent of total private consumption in 2025, representing the fourth consecutive year of decline. Notably, Croatia reported the highest retail share within the EU, with nearly half of all consumer spending directed toward the retail sector.

While purchasing power and overall retail turnover have shown growth at the European level, the relative share of consumer budgets dedicated to retail has contracted steadily for four years. The drop to 31.9 percent in 2025 highlights a structural change rather than a decrease in total consumption; instead, households are shifting their financial resources toward services such as travel, hospitality, and leisure activities. This shift is most pronounced in Western Europe, while consumers in Eastern and Southeastern European nations still dedicate a significantly higher portion of their budgets to retail.

The disparity between EU member states is quite clear. Croatia leads with a retail share of 48.3 percent, followed by Lithuania at 45.7 percent, Bulgaria at 44 percent, and Hungary at 43.2 percent. Conversely, Germany recorded the lowest retail share in the bloc, marking yet another decrease from the previous year. In Germany, less than one out of every four euros spent by consumers was allocated to retail, with the sector accounting for a mere 22.2 percent of private consumption.

“The key finding is not that Europeans are spending less, but that they are spending differently,” explained study lead Philipp Willroth from NIQ’s Geomarketing department. “Retail turnover continues to grow, yet an increasing share of consumer budgets is flowing into services and experiences. This points to a structural shift in spending priorities across Europe. Rising purchasing power no longer translates automatically into higher retail spending.”

Despite the backdrop of geopolitical volatility and persistent inflation in certain regions, purchasing power across the EU continued to rise in 2025. Per capita purchasing power reached an average of 22,425 euros, which is a nominal 3.3 percent increase over the revised figures for 2024. Altogether, residents across the 27 member states had approximately 10.1 trillion euros available for various expenses, including food, housing, services, and mobility. The most significant growth was seen in Poland (+8.8 percent), Lithuania (+8.3 percent), Romania (+7.7 percent), and Bulgaria (+7.3 percent), signaling ongoing economic convergence in Southern and Eastern European markets.

Following a period of robust growth, the rate of retail turnover growth in the EU slowed to 2.1 percent in 2025, as post-pandemic spending patterns began to normalize. The strongest gains were concentrated in Northern and Eastern Europe, with Norway leading at 13.1 percent and Lithuania at 10.5 percent, supported by rising wages. In contrast, major Western European markets have struggled, with the United Kingdom reporting a decline of 0.6 percent, which has acted as a drag on the region's overall growth.

Inflation across the EU stabilized further in 2025, averaging 2.5 percent, which is nearing the European Central Bank’s target. While Romania (6.8 percent) and several Eastern European nations saw higher rates due to labor market pressures, France reported a low rate of 0.9 percent because of weaker demand and a stable energy mix. However, inflation across the EU-27 is projected to climb to 3.1 percent in 2026, primarily due to anticipated renewed pressures within energy markets.