After a period of very strong inflation, many products are now in disinflation or even seeing their price decreasing. Food inflation in particular, previously a major issue for households following the invasion of Ukraine, has cooled significantly. Consequently, food sales in volume bottomed out in late 2023 in the US and many European countries and are now rebounding. Nevertheless, most product categories have been experiencing sluggish growth since 2023. In the US, health and personal care continue to grow at a fast pace while furniture sales in volume have been decreasing steadily. In the Eurozone, most sales in specialized stores decreased in volume terms in 2023. Digital sales have been progressing in the US and the UK but remained mostly flat in continental Europe.

Like many other sectors, retailers managed to offset some of the declining volume by passing on higher prices to consumers. On the cost side, wage growth, high energy prices and increased financing costs are also still weighing on a number of firms in the sector. Against this backdrop, some specialized retailers went bust or had major financial issues in 2023. Overall, general retailers and specialized retailers had an EBIDTA margin of 7% in 2023 while food retailers an EBIDTA margin at 6%. However, the outlook for specialized retailers is much more challenging as falling volumes can no longer be compensated by higher prices and pricing power is waning.