Navigating the Headwinds: What European Retailers Are Telling Us About Pricing Strategies and Sector Performance

Since joining Revionics at the midpoint of 2025, one of my top priorities has been meeting with as many of our customers as possible.

This September, I had the privilege of embarking on a European tour—visiting retailers throughout the continent, from the U.K. and Italy to France and Romania. During these meetings, my goal was simple: to listen and absorb their feedback on the high-stakes environment they operate in. Key points of discussion were:

• How is your business performing in the current economic climate?
• What factors have the biggest impact on your pricing strategies?
• How can Revionics help you manage through disruption?

While the markets in Europe are incredibly diverse, three overarching themes surfaced as top of mind for retailers, all pointing toward an urgent need for pricing agility and strategic scale.

1. Global Uncertainty Translates into Local Risk

Coming up in nearly all conversations was the prevalence of global macroeconomic uncertainty.

While U.S. tariff policies and international trade risks may seem distant concerns for some regional operators in Europe, the ripple effects of tariffs are tangible across European supply chains. Volatility in sourcing and managing supply chains means costs can change rapidly and without warning.

Against this backdrop, retailers recognize that agility is essential.

As seen during the pandemic and periods of high inflation, retailers that can analyze, decide, and act quickly to integrate cost changes into their pricing structure will consistently outperform their peers. In a volatile world, pricing speed is competitive armor.

2. Consumer Sentiment Dictates a Surgical Pricing Balance

While headline inflation has stabilized in the euro area, the prolonged inflationary conditions—especially in food, which peaked above 15%—have fundamentally changed the relationship between the consumer and price. There are real headwinds impacting consumer confidence in Europe right now.

This means every price decision carries more weight. Retailers are forced into a balancing act:

• Price too low and you jeopardize your margins and business health.
• Price too high and you lose the customer to the discounter down the street.

Shoppers are speaking clearly through their wallets: They are driving muted volume growth and a sharp shift in spend from national brands to private labels. Both of these trends are clear symptoms of heightened price sensitivity, putting immense pressure on retailers to price with surgical precision.

3. Margin Pressure Fuels Market Consolidation

The European retail sector is characterized by an accelerating wave of market consolidation. This is particularly true in grocery, with M&A activity increasing roughly 30% in the past five years.

As grocery retailers contend with razor-thin margins, many are pursuing consolidation to secure economies of scale and increased buying power to offset rising costs and fuel growth.

As the competitive landscape evolves rapidly due to this consolidation, retailers need the right AI tools to quickly adapt, prioritizing pricing that moves with market changes and competitor actions.

The Role Revionics Plays: A Strategic Lifeline

In an environment defined by instability, price pressure and consolidation, our customers increasingly view our AI pricing platform not just as a tool but as a strategic lifeline.

Retailers are focused on more than just setting a price; they are actively working to curate a strong value perception and build lasting relationships with their shoppers, knowing that loyalty is fragile.

With advanced pricing intelligence, we’re helping our customers compete more effectively and find untapped margin potential.

When global factors create chaos, retailers need data-driven solutions that provide certainty in the one area they can control: their pricing strategy. That’s the mission we are executing across Europe and around the world.