In 2024, the retail sector has undergone a major cycle of concentration and a quest for greater efficiency. On the consumer side, trade-offs were less marked than in 2023, but are continuing. Although supermarket prices have been falling since June, they remain high on a face value basis. Over a rolling 3-year period to the end of June 2024, prices were up 22% in France, 30% in Germany, 26.5% in the Eurozone and 19% in the U.S.A.
In 2024, financing strategies were heavily influenced by the rise in interest rates and the constraints associated with the debt accumulated during Covid-19. For those who had borrowed at low cost, this is the ‘debt wall’. The issue is particularly acute in the retail sector, where margins are low. The challenge is to generate EBITDA to finance transformation plans (and price cuts) and repay residual debt. According to Jean-Pascal Mathieu, Senior Director at Sapiens, “the AI steamroller is pushing them to speed up the modernisation of tech and IT thanks to case studies that grow industries”.
2024 highlights by sector
-In food: In Europe, the leaders are doing well (Tesco, E.Leclerc), “but the players at the back of the pack are suffering and some are going to disappear”, according to Daniel Ducrocq, Vice President Western Europe Retailer Services at NielsenIQ. Concerns about profitability are high, and supplier concentration is almost inevitable in a number of countries’. We saw this in France in 2024, with takeovers (Cora and Casino), in Belgium (Mestdagh) and in Sweden (City Gross).
In France, after a 1% fall in volumes in 2023, the downturn seems to have stopped. Over the period January-October 2024, total supermarket volumes are up by 0.2%. Omnichannel e-commerce (drive, excluding pure-players) is the big winner of the year, and convenience stores are holding up well. However, hypermarkets and supermarkets are losing volume.
Non-food in difficulty: This is the case for fashion, where second-hand goods accounted for 19% of online fashion sales in 2024 (Fox). Today, other sectors are under threat, such as household goods, due to the fall in property transactions (down 17% in France over the 12 months to the end of September). In 2024, sales by the world’s No. 1 retailer, Ikea, fell for the first time in 5 years. After peaking in 2021 under Covid-19, online sales of household electrical goods are falling in Europe. This sector is seeing a concentration of suppliers in Italy (Unieuro – Fnac Darty) and France (Rue du Commerce – LDLC). It is also the end of the golden age for luxury goods, penalised by a price image and weakening demand in China. In 2024, worldwide sales have fallen for the first time since 2009 (excluding Covid-19). In H1 2024, LVMH’s sales fell by 1%.
E-commerce remains dominated by marketplaces. In France, 9 of the top 15 e-tailers are marketplaces. Very low-priced Asian marketplaces (Temu, Aliexpress, Shein) continue to enjoy insolent growth, as do, to a lesser extent, second-hand marketplaces (Leboncoin, Vinted, Ebay). The marketplaces run by Amazon, Cdiscount and Rakuten are losing their audience.
The 6 key themes of 2025
1. Omnichannel to marketplaces and click & mortar: Redefining hybrid retail for efficiency and impact
2. Boosting team performance and retention: HR’s new frontier
