Whilst the broad structure of the market has remained the same over the last decade, there has been a marked increase in the number of discounter format stores whilst growth in hypermarkets has stalled. Rapid development in Eastern Europe has seen the large western retailers battling over market share, and a number of important company takeovers and mergers have created more consolidation within individual countries.

Vale growth in overall market size has been steady but at a low rate (3-4%) in most regions, with countries such as Germany and France showing stagnation, in line with their economic growth. This has been the main impetus for almost all the large grocery retail companies to move into overseas markets. The other main effects of stagnation and low growth has been to force prices down (discounter retail formats continue to make significant progress in almost all countries) and to make the larger chains move into non-food items in a concerted way.

In 2005, the key issues facing the Western European grocery retailer market will be further consolidation, the accession of the 10 new countries into the EU, the growth of discounters and retailer-supplier relations. Many analysts are also waiting for a significant acquisition by the U.S. behemoth Wal-Mart, which could profoundly alter the European retailing market dynamic.

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