Grocery Retailing in Eastern Europe

March 2020

Grocery retailing in Eastern Europe is growing moderately. A major structural change is being seen, as evidenced by the dramatic decline of traditional grocery retailers, which is giving way to large modern grocery retailers. As the market transitions towards consolidation and maturity, the largest players will experiment with new store concepts and digital innovations.

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This report comes in PPT.

Key Findings

The market is on the path to consolidation and maturity

In the last few years, the largest Russian retailers, such as X5 Retail Group and Magnit, were opening hundreds of stores each year; thus penetrating regions with virtually no presence of modern grocery retailing. This is a good example of the situation in the region, where independent retailers are dramatically losing against big players.

Discounters is a channel with great potential in markets outside of the EU

Discounters have been a hit among consumers in many Eastern European countries, such as Poland, Romania and the Czech Republic. At the same time, discounters have no presence in Russia and Ukraine, where value-seeking consumers would receive the new format well.

Traditional grocery retailers are losing out to modern formats

In almost all Eastern European markets the landscape is dominated by modern grocery retailers. Modern grocery retailers are rapidly cannibalising the sales of traditional grocery retailers, mainly due to greater economies of scale and higher value for shoppers. This trend is expected to continue in those markets where the share of traditional grocery retailers is still high.

Sustainability trend emerges gradually

Eastern Europe is not at the forefront of environmental consciousness among consumers, unlike Western Europe. Yet themes of sustainability are becoming ever more important for consumers in Eastern Europe. Grocery retailers will need to respond accordingly by offering recycled packaging, lowering CO2 emissions in their operations, and participating in various other sustainability initiatives.

New technologies provide immense opportunities

As more and more Eastern European consumers are connected to the internet, retailers are able to reach out to them using various digital channels. This provides great opportunities for interaction and offering personalisation.

Key findings
Eastern Europe posts weak growth in times of uncertainty
Grocery retailers set to post stable growth
Modern grocery retailers grows…
…at the expense of traditional grocery retailers
Poland sees the strongest growth in market size, followed by Romania
Growth of modern retailers compensates for the decline of traditional
Eastern European markets move toward s consolidation
Sharp dynamism of top 10 companies, determined by the low base
Russia has domestic champions; foreign companies prevail in EU markets
Pyaterochka climbs to the top, Magnit and Lidl remain strong
Region’s main markets to show moderate growth
In many countries, a demographic decline means weak growth
Grocery retailing goes digital, while lines between industries are blurring
Russia: market context
Russia: competitive and retail landscape
Poland: market context
Poland: Competitive and retail landscape
Romania: Market context
Romania: competitive and retail landscape
Ukraine: market context
Ukraine: competitive and retail landscape
Czech Republic: market context
Czech Republic: competitive and retail landscape
Hungary: market context
Hungary: competitive and retail landscape
Belarus: market context
Belarus: competitive and retail landscape
Slovakia: market context
Slovakia: competitive and retail landscape
Croatia: market context
Croatia: competitive and retail landscape
Serbia: market context
Serbia: competitive and retail landscape
Bulgaria: market context
Bulgaria: competitive and retail landscape
Lithuania: market context
Lithuania: competitive and retail landscape
Slovenia: market context
Slovenia: competitive and retail landscape
Latvia: market context
Latvia: competitive and retail landscape
Estonia: market context
Estonia: competitive and retail landscape
Bosnia and Herzegovina: market context
Bosnia and Herzegovina: competitive and retail landscape
Georgia: market context
Georgia: competitive and retail landscape
North Macedonia: market context
North Macedonia: competitive and retail landscape


Retail is the sale of new and used goods to consumers from a business for personal or household consumption from retail outlets, kiosks, market stalls, vending, direct selling and e-commerce. Retail is the aggregation of Retail Offline and Retail E-Commerce. Excludes specialist retailers of motor vehicles, motorcycles, vehicle parts. Also excludes fuel sales, foodservice sales, rental transactions, and wholesale sales (e.g. Cash and Carry). Sales value excluding or including VAT/Sales Tax. Retail also excludes the informal retail sector. Informal retailing is retail trade which is not declared to the tax authorities. Informal retailing encompasses (a) sales generated by unregistered and unlicensed retailers, i.e. retailers operating illegally, and (b) any proportion of sales generated by a registered and licensed retailer that is not declared to the tax authorities. Unregistered and unlicensed retailers operate predominantly (although not exclusively) as street hawkers or operate open market stalls, as these channels are harder for the authorities to monitor than permanent outlets. Activities in the illegal market, which is usually understood to refer to trade in illegal, counterfeit or stolen merchandise, are included within our definition of informal retailing. Activities in the “grey market”, which is usually understood to refer to trade in legal merchandise that is sold through unauthorized channels – for example cigarettes bought legally in another country, legally imported, but sold at lower prices than in authorized channels – will be included as informal retailing if no tax is paid on sale by the retailer. However if the retailer pays tax – for example on cigarettes bought legally in another country but sold at a lower price than standard – the sale is included within formal retail.

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