European Consumers Shift Spending Beyond Retail as Retail Growth Slows
Retail is accounting for a declining share of consumer spending across Europe, despite continued growth in purchasing power and retail sales, according to a new study by NIQ Geomarketing.
In 2025, an average of 31.9% of private consumer spending across the EU’s 27 member states went to retail, with the figure falling for the fourth consecutive year. NIQ says the trend reflects a broader shift in consumer priorities, with a growing share of household budgets being spent on services, leisure, and other non-retail categories.
Spending patterns vary across Europe
Spending patterns vary significantly across Europe. Croatia recorded the highest retail share at 48.3%, followed by Lithuania at 45.7%, Bulgaria at 44.0%, and Hungary at 43.2%. Germany had the lowest share among EU member states, at 22.2%, while other higher-income Western European markets also allocated comparatively more spending to services and other categories.
At the same time, European purchasing power continued to rise in 2025. Average purchasing power per capita reached €22,425, up 3.3% nominally from the revised 2024 figure. The strongest increases were recorded in Poland, Lithuania, Romania, and Bulgaria, pointing to a continued narrowing of income differences between Western and Eastern Europe.
EU retail sales grew
EU retail sales grew by 2.1% in 2025, slowing from 3.0% in 2024 and 5.5% in 2023. Northern and Eastern European markets recorded some of the strongest growth, led by Norway at 13.1%, Lithuania at 10.5% and Sweden at 8.9%. By contrast, major Western European markets remained weaker, while the UK recorded a 0.6% decline.
NIQ also reported that average EU inflation stood at 2.5% in 2025. Romania recorded the highest rate at 6.8%, while France had one of the lowest at 0.9%. NIQ expects inflation across the EU-27 to rise to 3.1% in 2026, driven mainly by renewed pressure on energy markets.
The findings suggest that rising purchasing power is no longer automatically translating into higher retail spending. Instead, consumers across Europe are increasingly directing their budgets towards services, leisure, and other areas outside traditional retail.