August 6, 2026 – Financial pressures remain a key issue for consumers and with inflation in Europe projected to remain elevated. At least in the near term, cost of living concerns will continue to impact consumer confidence and spending. However, while consumers are more careful about what they spend and are scrutinizing value more closely, they are not always making decisions on price alone. They are adopting smarter and more flexible spending approaches, are weighing up options carefully and remain willing to spend more on features, benefits and experiences that they deem are worth it. Innova Market Insights examines retail food trends to help brands understand and strengthen their relevance with their consumers.
Why Do European Consumers Remain Cautious About Their Spending?
Most consumers in Europe are negative about the state of the world, and more are negative than positive about their country’s economic outlook. This is driving uncertainty about the future and impacting consumers’ confidence. European retail food trends show that financial pressure is the number one issue impacting consumers in Europe. Lack of affordable housing and healthy food, coupled with concerns around wages not increasing and job availability, are contributing to financial pressures. Europeans also expect their financial situation to worsen in the next year rather than improve. However, younger generations are more optimistic than older ones. For these reasons, the majority of European consumers are actively looking for ways to optimize their spending and are more careful about what they spend on food and beverages now than a year ago.
How Are Europeans Managing Their Food Spending?
When it comes to food purchase decisions, European consumers are scrutinizing prices and value more closely. More than 3 in 5 are more careful about evaluating whether a product is worth it and check prices even on small items. There is also a shift to buying more store brands among over half of consumers. Buying in bulk is a spending strategy as well. Retail food trends reveal that younger Europeans are adopting more flexible approaches to managing their spending. They are more likely than older groups to cut back in some areas to spend more on others. This group also alternates between premium and budget versions of the same product. Gen Z in particular appears to be less price- and value-focused than other generations. As consumers weigh up spending decisions in food more carefully, brands in the European retail food market will need to make value more visible.
Are There Premiumization Opportunities in European Food Retail?
Premiumization opportunities exist in food and beverages in Europe, though a targeted approach is needed as there are key differences between younger and older generations. Particularly in terms of where they will invest and what’s worth paying more for. Income level is also a key factor.
What Are Europeans Willing to Spend More on in Food and Beverage?
European retail food trends show that 44% of consumers say their spending on food and drink has increased somewhat or significantly over the past 12 months. However, increased prices aren’t the only reason that consumers are spending more on food and beverages. Healthier eating and cooking from scratch are also leading factors for increased spending. Freshness, local provenance, and cleaner labels are also features Europeans are willing to pay more for. Consumers will also pay more for products with fewer artificial ingredients, as well as artisanal and treat products. Among younger generations, Millennials and Gen Z, active choices like eating more protein and buying higher-quality products are more prevalent as a reason for increased spending, compared to older generations.
What’s Next in Retail Food Market Trends in Europe?
With consumers weighing up their choices more carefully, paying closer attention to price and adopting more flexible spending approaches, a clearly communicated and tangible value proposition is key. Differing attitudes to value require brands to deploy distinct product and communication strategies to effectively target the needs of different groups. Specifically, retail food trends indicate that Gen Z is more willing to pay for function and experience in food and beverages. Physical and mental benefits, protein, convenience, and quality present strong added value levers for this group. On the other hand, Boomers are more price conscious and engage at higher levels with fewer added value levers. Freshness and local provenance are the top features they will pay more for.
Higher-income consumers are also willing to pay more for a wider range of benefits and features in food and beverage than lower-income groups, including premium ingredients and sustainable packaging. With consumers in European countries experiencing and responding to current financial pressures differently, brands need to reflect country dynamics in their strategies. For example, consumers in the UK are relatively upbeat about their country’s longer-term economic outlook and their own current and future financial situation, while consumers in France are feeling much more downbeat. Crafting, communicating, and delivering a clear and tangible value proposition for each target audience is critical for retail food brands.
This article is based on Innova’s Cost of Living: Impact on Consumer Spending Behavior in Europe report. This report is available to purchase or with an Innova Reports subscription. Reach out to learn more.