Portugal food retail outpaces Europe with strong real growth

Portugal’s food retail sector recorded real growth more than four times higher than the European average in 2025, highlighting a stronger-than-expected recovery in consumer demand in one of the country’s largest domestic sectors.

The sector expanded by 2.3% in real terms, compared with 0.5% in Europe, based on the “State of Grocery 2026” report by McKinsey and EuroCommerce. In nominal terms, growth reached 5.2% in Portugal, above 3.1% in Europe, “reflecting a greater overall dynamism of the sector”, the study shows.

The report suggests that the improvement is not solely driven by price increases, noting that the performance “indicates an effective recovery of consumption, beyond the inflationary effect”. However, underlying trends remain uneven, with volumes still contracting in Portugal (-0.5%) while rising in Europe (+0.6%).

Other indicators point to structural differences in the Portuguese market. Private-label products account for 47.7% of sales, well above the European average of 40%, while promotional intensity has declined. At the same time, some channels are under pressure, with online grocery sales falling sharply in Portugal (-13.9%) even as they grow in Europe (+6,8%).

“Similarly, the discounters segment has seen a sharp decline (-4.3%), whilst in Europe it is growing (+5.0%), indicating a significant divergence from the European trend”, the study adds.

Overall, the report, which brings together the views of more than 35 industry executives and over 15,000 consumers across 14 European countries, anticipates that “the food market remains under pressure, but signs of renewed dynamism are beginning to emerge, particularly in the defence of margins, the pursuit of growth beyond the core business, and the adoption of technologies (AI and automation) with a real impact on the business”.