Retail Report 2024 Confirms 35% Food Retail Growth Since Pre-Pandemic

On Wednesday 28 February 2024, Luxembourg's Ministry of the Economy, together with the Luxembourg Confederation and Chamber of Commerce, presented the “Retail Report 2024”.

Lex Delles, Minister of the Economy, SMEs, Energy and Tourism, Carlo Thelen, Director General of the Chamber of Commerce, and Tom Baumert, President of the GIE National Observatory of SMEs and director of Luxembourg Confederation, presented the report which provides global information on the retail industry, its structure as well as its geographical distribution. It also provides new conclusions on the development of retail trade. The “Retail Report 2024” thus highlights three key observations on the commercial situation in Luxembourg:

1. At the end of the third quarter of 2023, the total commercial surface area of all the businesses studied in the Grand Duchy amounted to nearly 1.11 million m2, which is equivalent to a commercial surface area of 1.67 m2 for each of the country's 661,000 inhabitants. The figures also show that the evolution of sales areas (+5.2%) has gradually followed that of the population (+5.5%) since the start of data collection in 2019. The most recent figures are rather the expression of a balance between supply and demand. In annual comparison between 2022 and 2023, both traditional retail and the Horeca sector demonstrated relative robustness in terms of number of companies, without major change.

2. Concerning the food retail trade, which is the subject of particular attention in this second edition of the “Retail Report” (chapter 9), interesting trends can also be observed. Since data collection began in 2019, food retail as a whole has seen continued growth in the number of points of sale and sales space, which has even outpaced population growth. Among all operational forms, the category of “hard-discount supermarkets” has experienced above-average growth of almost 20% since 2019, and their sales areas have even increased by more than 35%. Food stores offering an international assortment (+19.2% points of sale) as well as specialized food stores (+19.7%) are the other “winners” in the sector.

3. Since 2019, however, there has been a slight decline in retail activity in the country's city and town centres. The figures reveal that there is a trend towards the reallocation of traditional sales areas into areas used primarily by the services and Horeca sector. This development was accompanied by a decrease in the relative weight of retail trade (from 41.6% in 2019 to 37.5% at the end of 2023) compared to other economic sectors in city and town centres. This trend is not specific to Luxembourg, but is frequently observed in the European context. This structural change is also the expression of a growing multifunctionality of city centres as spaces of discovery.

Minister Delles underlined in this context that “local businesses enliven our towns and city centres, contribute to their attractiveness and can thus improve the quality of life. In this context, proactive management of retail development plays an increasingly important role in promoting an attractive and dynamic offering and ensuring that physical points of sale remain a vital element of our city shopping centres. In this context, the Retail Report allows us to understand, support and actively shape developments in retail. This allows us to prepare businesses for change, encourage entrepreneurship and boost the economy. The 2024 edition of this report also highlights that the sales area per capita has remained stable over the last four years, which reflects a healthy environment."

The “localyze.lu” tool is bearing fruit and helps reduce the risks associated with long-term rental for traders. In this context, all interested merchants, restaurateurs and businesses in Luxembourg now have the opportunity to register on the Luxembourg Confederation's “Localyze.lu” service in order to benefit from a detailed analysis of their location.

Thanks to land register data, “Localyze.lu” can provide relevant information on competition in the sector of activity, and also provide statistics on the national and regional evolution of the sector since 2019, also with an interactive map to better understand the current competitive situation. In addition, the merchant will have a series of complementary socio-demographic data to better assess the potential of new commercial sites.

The “Retail Report” and Localyze.lu are central areas of action of Pakt Pro Commerce, a political initiative launched in April 2016. It aims to boost and support the development of local commerce through a series of practical actions. It is therefore a major strategic tool for guiding the policy to be implemented.