The Impact of Demographics on European Retailing: 2000-2030

January 2018

Demographic and macroeconomic changes may be slow, but they are as big as they are inevitable. Smart retailers in Europe will need to have a firm grasp on how the regions in which they are present are evolving, and what the customer base of the future will look like. This report not only outlines the most important changes in Europe over 2000-2030, but ties them to specific strategies which retailers and their partners can use to avoid falling behind the times.

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Inequality is a common thread in many trends

Income inequality is a serious issue, but disparity is not limited to the growing gap between the upper class and everyone else. Inequality is also apparent in the differences between Western and Eastern Europe, and the young and the old. At such a large scale, treating everyone the same makes little sense, but it is an awfully common concept in business models of the past that make money from catering to the masses. It is time to rethink that model.

The elderly population will continue to grow in size and spending power

Declining fertility and lower net immigration into Europe, along with increased life spans, will be leading Europe into an older, greyer populace over the period to 2030 and beyond. As those of increased age account for a greater share of the population, they will also obtain more economic and political power, making them a key cohort for retailers to keep tabs on.

Timelines and living situations are changing most for the young

As usual, change is most acute in the younger generations, who are still figuring out how to set up their lives. Many, whether by choice or economic necessity, are putting off starting families by about three years. In this time they are choosing to focus on their education and careers and split the cost of living with friends and significant others.

The future still holds hope

Analysis of socio-economic trends often carries with it an undercurrent of doom and gloom. While there are issues that should be addressed, change will not upend society as we know it. Goals such as homeownership and starting a family will remain as important as always. And from those families we will create the next generation of progress. Gen Z, the youngest among us, are predicted to carry this torch as they thrive in a digitally connected society they grew up in.

Introduction

Scope
What’s in store for Europe and its retailers through to 2030?
Key findings

Ageing Populations

Late-lifers grow the most, young adults see the largest losses
The oldest countries in 2030
Low fertility rates contribute to ageing populations
Marriages and births are later in life, but with the same cadence
Migration will not compensate for the demographic slowdown
Net migration may fall, but the top destinations remain the same
Retail takeaways: Ageing populations

The Changing Household

Home ownership hits a wall, but will not fall
The share of urban residents will continue to grow across Europe
Top countries for urbanisation put Western Europe front and centre
Household sizes are shifting to single and 2-person formats
Single-person households may comprise 40% of all households
2-person households grow with the rise of roommates

The changing Household

Retail takeaways: The changing household

Income & Expenditure Distribution

Income is shifting to the older populace
But this change can be explained by the demographic shift
More important is that income is shifting to the wealthier populace
Rising income inequality is a worrying norm across Europe
Spending priorities differ between Eastern and Western Europe
Expenditure on housing continues to crowd out other categories
Retail takeaways: Income and expenditure distribution

The Broader Retail Impact

What retailers and their p artners n eed to know
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