The European retail real estate sector recorded its first increase in investment volumes in five years in 2025. According to the latest Savills report “European Grocery Report 2026,” the value of transactions involving grocery assets rose by 16% year-on-year, reaching €6.1 billion. The market is gradually shifting toward smaller retail formats, while traditional hypermarkets are losing market share to convenience stores and discount chains.
The share of hypermarkets in the European grocery market declined from 12% in 2019 to 10% in 2024, with forecasts pointing to a further decrease to 9% by 2029. At the same time, the average size of grocery stores in Europe shrank by 2.6% between 2020 and 2024. Retail chains are planning to reduce the floor space of selected stores by as much as 25%, reallocating the recovered space for last-mile logistics operations or leasing it to other businesses.
“Changing consumer habits are forcing operators to redefine their real estate portfolios. Today’s customers prioritize speed and proximity, which shifts the strategic focus toward dense urban networks and smaller formats that better match everyday shopping missions,” said Elżbieta Majdan, Associate Director of Property & Asset Management Retail at Savills Poland.
She points to Carrefour’s transformation strategy as an example. The retailer plans to launch 1,750 new convenience-format stores in France and Spain by 2030, significantly expanding its presence in smaller neighborhood locations.
Market Liquidity Driven by Sale-and-Leaseback Transactions
The increase in investment volume to €6.1 billion was largely driven by large portfolio transactions, whose value rose by 35%. A key role was played by sale-and-leaseback (S&LB) transactions, which accounted for 21% of the total market investment volume—the highest share recorded in the past 13 years.
The report also highlights a significant inflow of capital from North America, with activity by U.S. investors 59% higher than the five-year average.
“Facing pressure on margins and the need to modernize energy systems, retailers are increasingly using sale-and-leaseback transactions to unlock capital tied up in real estate,” said Wioleta Wojtczak, Head of Research at Savills Poland.
“For investors, grocery properties with long-term indexed leases represent an attractive investment product. Although average prime supermarket yields across Europe remained at 5.8% in the fourth quarter of 2025, we expect further yield compression in the coming months.”
Consumers in a New Economic Reality
Despite food price inflation slowing to 2.5% by the end of 2025, European households remain cautious with spending. The household savings rate in the eurozone reached 15.1%, significantly higher than the 12.6% average recorded between 2014 and 2019.
This environment supports the growth of private-label brands and discount retailers, whose revenues have increased by an average of 5.2% annually over the past decade—almost twice the growth rate of traditional mass-market retailers, which averaged 3.2%.
Digitalization and Sustainability
The future of grocery retail will increasingly rely on an omnichannel model, where physical stores function as fulfillment centers for online orders. Online grocery sales in Europe (excluding the UK) are expected to stabilize at around 4.8% by 2028.
At the same time, retailers face growing capital requirements related to ESG regulations, including the replacement of refrigeration systems and the installation of photovoltaic panels. These investments are becoming a permanent element of capital expenditure planning for retail chains.
How Poland Compares with the Rest of Europe
Poland reflects many of the trends outlined in the European report, although the market maintains its own specific characteristics.
Food, beverages, and tobacco products remain the strongest category in Polish retail, accounting for 25.7% of total retail sales in 2025. At the same time, these products are the least frequently purchased online. The share of e-grocery sales in Poland averaged around 0.9% per month in 2025, significantly below the projected European average.
Like the broader European market, Poland’s grocery sector is moving toward multi-format retail strategies. Chains such as Auchan and Carrefour operate across multiple formats, ranging from hypermarkets and supermarkets (1,000–2,000 sq m) to neighborhood stores (MojeAuchan, Globi, Express) and ultra-convenience formats located at fuel stations.
Data from Statistics Poland (GUS) confirm the gradual shift away from large retail formats. At the end of 2024, Poland had 545 hypermarkets, a decrease of one location compared with 2020. Meanwhile, the number of supermarkets reached 10,647, representing an increase of 2,477 stores over the same period.
Strong Investor Interest in Poland’s Grocery Real Estate
Investor interest in the Polish grocery real estate sector remains strong. One example of an active investor is Centerscape, which announced in 2026 the acquisition of a Lidl store in Mszczonów and a Biedronka store in Lidzbark.
Investors are also increasingly targeting retail parks anchored by strong grocery operators. This trend is reflected in recent major transactions, including the acquisition of eight Auchan shopping centers by Shopper Park Plus and the planned purchase of a portfolio of Intermarché and Bricomarché properties by U.S.-based Ares Management Corporation.
Overall, the grocery retail sector is emerging as one of the most resilient segments of the European commercial real estate market, supported by stable consumer demand, evolving retail formats, and continued investor appetite for assets with long-term lease structures and reliable income streams.
