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What’s Next for Europe’s Retail Sector In 2025?

0.1%—that’s the real increase in food sales when adjusted for inflation in Europe. Despite marking the first sector-wide growth since the COVID-19 crisis in 2020, the retail industry still faces mounting challenges. With profitability under pressure and growth set to remain minimal in 2025, retailers must navigate a complex economic landscape.

Key Facts

  • Grocery sales grew by 2.4% in 2024, according to a report by McKinsey & Company and EuroCommerce, which represents 28 national trade associations and over 5 million companies.
  • This 2.4% growth barely outpaced food price inflation (2.3%), leaving a real gain of just 0.1%.
  • Consumers, squeezed by ongoing economic pressures, remain cautious in their spending, though retail executives express optimism for 2025.
  • The report indicates little change in consumer behavior from 2024, suggesting spending patterns are stabilizing.
  • While some markets show early signs of recovery, long-term forecasts remain bleak: the European retail sector is expected to grow just 0.2% annually through 2030, while retailers battle rising inflation and labor shortages.

Retailers Brace For A Tough Road Ahead

Despite the modest rebound, the retail sector’s path forward remains fraught with challenges. As costs continue to rise and growth remains sluggish, retailers will need to find new ways to drive efficiency and sustain profitability in an increasingly competitive landscape.

EU Mercosur Agreement Sparks Political Battle Over Cyprus Agriculture

A political battleground emerged in the Parliamentary Agriculture Committee’s latest session, as fierce debates broke out over the controversial trade deal between the European Union and Latin American nations under the Mercosur framework. Lawmakers voiced deep concerns regarding food safety and the prospects for local agriculture, particularly following the high-profile absence of the Minister of Trade.

Minister Absence And Parliamentary Integrity

Committee Chair Giannakis Gabriel expressed strong disapproval over the Minister’s no-show, noting that the extraordinary session was scheduled at midday at the Minister’s own request. “His absence undermines the authority of the parliament,” Mr. Gabriel declared. Given that the Minister is not abroad, it was expected that he would be present to clarify why Cyprus supported an agreement widely criticized as disadvantaging the agricultural sector.

Trade Deal Under Scrutiny

In his address, A.C.E.L General Secretary Stefanos Stefanos described the pact as a “dangerous agreement” imposed under the pressure of multinational conglomerates. He especially critiqued the contrasting sanitary standards whereby, while the EU bans our farmers from using certain pesticides and antibiotics, the Mercosur deal appears to allow imports produced with these very substances. His remarks underscored the possibility of double standards in safety measures and the potential long-term impacts on Cypriot agriculture.

Economic And Safety Concerns

Legislators questioned the basis of government studies that justified backing the agreement, even as Cyprus’ agricultural sustainability is increasingly threatened by water scarcity and soaring production costs. Representatives from various political factions pointed to insufficient controls over import volumes and tariff structures. For example, Christos Orphanidis (DIKO) demanded precise data on imports from Latin America, citing honey as a case in point, and pressed for clear explanations regarding the tariff regime.

Legal And Health Implications

Questions about legal authority were raised by Elias Myriantounos (EDEK), who inquired whether parliament can reject or amend the agreement should economic studies forecast negative outcomes. Environmental advocates, like Haralambos Theopemptou of the Movement of Ecologists, emphasized the need to safeguard traditional products such as halloumi, highlighting concerns over how rigorous food safety controls will be maintained. Meanwhile, Linos Papagiannis (ELAM) cautioned against unfair competition, drawing parallels with challenges posed by lower-standard goods from occupied territories.

Protecting Local Interests

The overarching message from lawmakers was clear: the future of Cyprus’ farming community and the well-being of its citizens should not be sacrificed at the altar of commercial trade. Agricultural organizations have voiced alarm over the importation of goods potentially contaminated with banned substances, the risk of market distortion by low-quality products, and the lack of localized impact studies. They argue that the agreement is biased in favor of select corporate interests, ultimately undermining consumer safety and the livelihood of European farmers.

As this debate continues to unfold, the outcome of these deliberations will be pivotal in determining not only trade policy but also the long-term economic and food security landscape of Cyprus.

Parliamentary Committee Session
Economic Impact Discussion

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