Europe-5 comprises the top five economies in Europe — in order of size, those are Germany, the UK, France, Italy, and Spain. In 2023, these five economies accounted for 70% of the total GDP of Western Europe countries. Over the past few years, the retail sales growth in these economies was significantly impacted by the COVID-19 pandemic, global supply chain issues, decades-high inflation, and a weak economy. Here are a few growth trends that we saw for Europe-5 retail sales over the last few years and in 2023:

  • Europe-5 total retail sales. Following negative growth in 2020, total retail sales for Europe-5 countries grew strongly in 2021 and 2022. Total retail sales growth has slowed in 2023 but is still higher than the average growth during the pre-pandemic years from 2014 to 2019. We forecast that total retail sales for the Europe-5 countries will reach €2.7 trillion by 2028, with Germany, the UK, and France being the largest retail markets.
  • Europe-5 online retail sales. Online retail sales experienced negative growth in 2022 after extremely strong growth in 2020 and 2021. Though online retail sales growth returned to positive territory in 2023, it was much below the average growth during the pre-pandemic years from 2014 to 2019. Forrester expects online retail sales growth to rebound to pre-pandemic levels in 2024 and thereafter. Overall, we forecast that combined online retail sales in Europe-5 countries will increase from €372 billion in 2023 to €579 billion in 2028 at a five-year compound annual growth rate of 9.2%.
  • Europe-5 online retail penetration. Online retail penetration, which is the percentage of online retail sales out of total retail sales, has been steadily increasing in Europe-5. In 2022, however, online retail penetration declined, which was a result of the negative growth in online retail sales. In 2023, online retail penetration will remain flat because of moderate online retail sales growth. We expect the combined online retail penetration of Europe-5 to increase from 16% in 2023 to 22% in 2028, with the UK having the highest online retail penetration.
  • Europe-5 offline retail sales. Historically, offline retail sales growth lagged online retail sales growth because of strong drivers for online retail and the base effect. After large negative growth for offline retail sales in 2020, growth rebounded in 2021. 2022 was the first year when offline retail growth outpaced online retail growth as more consumers shopped in stores, and this momentum continued in 2023. We forecast combined offline retail sales in the Europe-5 countries to reach €2.1 trillion by 2028.

Our newly published report, Europe-5 Online Retail Forecast, 2023 To 2028, provides a five-year forecast for total retail sales, online retail sales, and online retail penetration of 22 product categories for each of the Europe-5 economies, with historical data going back to 2002.

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