European food retail sector faces fragmentation as consumer concerns over tariffs and savings reshape shopping habits

Recent changes in consumer behavior are gradually fragmenting the food retail sector across Europe, according to the latest Consumer Pulse study by dunnhumby. The semiannual report, which now covers ten European markets including new additions such as Ireland, the Netherlands, Norway, Sweden, and Denmark, provides a detailed look at how shoppers are changing their habits in a rapidly evolving market.

The study highlights that tariffs have become the top concern for European grocery shoppers. About 67% of respondents said they worry about the impact of tariffs on their food purchases. This level of concern surpasses other major issues such as inflation, the conflict in Ukraine, and climate change. The focus on tariffs reflects growing uncertainty about food prices and supply chains across the continent.

Despite these concerns, European consumer confidence remains more stable than in the United States. Data from the Organization for Economic Cooperation and Development (OECD) shows that while consumer confidence is declining globally, the drop has been much sharper in the U.S. than in Europe. European shoppers appear more resilient in the face of economic challenges.

The report also notes a shift in purchasing patterns toward private label products and discount retailers. Shoppers are increasingly seeking out discounters and using coupons as they look for ways to save money. These trends give retailers a clear set of priorities as they work to strengthen their offerings and respond to changing customer needs.

Loyalty programs remain important, but the study finds that expectations vary widely between countries. While most shoppers use loyalty programs to save money, some prioritize personalized offers or ease of use. Retailers are being challenged to adapt their loyalty strategies to meet these diverse preferences.

Specialized retailers are gaining significant ground in Europe’s food retail landscape. Although they still hold a smaller share of the overall market compared to supermarkets and hypermarkets, specialized formats have seen a 331% increase in visitor numbers since 2023. This growth far outpaces that of traditional grocery stores and discount chains.

The Consumer Pulse study also points out that European shoppers are clustering around key factors such as health, convenience, and savings when making food purchases. These priorities are shaping not only what people buy but also where they choose to shop.

The findings suggest that food retailers across Europe will need to continue adapting quickly as consumer behavior becomes more fragmented and complex. The rise of specialized stores, increased focus on tariffs, and shifting loyalty program expectations all point to a market that is moving away from one-size-fits-all solutions toward more tailored approaches for different groups of shoppers.