PARIS, 01 Feb. - (ANA) - With 5 million businesses, 30 million jobs, and a direct impact on 450 million consumers daily, the retail sector is at the heart of Europe's communities. 

 

But small retailers are facing unprecedented challenges: market concentration, digital disruption, and rising costs are reshaping the landscape. This report looks at how digital, green and skills shifts in the EU are reshaping SMEs in towns and cities.

 

The retail sector is undergoing rapid change. Digital and green transitions, demographic shifts and evolving consumer behaviour are reshaping how people shop and how businesses operate. These trends are particularly evident in towns and city centres, where retail plays a key role in economic and social life.

 

Small and medium-sized enterprises (SMEs) are at the core of this transformation. They represent the majority of retail businesses and jobs, but face increasing pressure from rising costs, technological change and shifting consumer and regulatory expectations. At the same time, SMEs are well positioned to adopt digital tools, pursue sustainable practices and contribute to local economic renewal, provided they have access to the right support and enabling conditions.

 

The report is structured in three main chapters. The first provides an overview of the EU retail ecosystem, analysing recent changes in the competitive environment for retail and wholesale SMEs and reviewing policy responses at both EU and national levels. The second examines employment trends in the sector, with a focus on evolving skill demands and workforce development. The third explores the role of urban policy in shaping vibrant retail spaces, particularly in supporting their adaptability and resilience amid ongoing structural shifts.

 

 

 

 

Retail ecosystems are undergoing profound structural transformation. Global trends such as the rise of e-commerce and growing environmental awareness are disrupting traditional business models, creating both challenges and opportunities for retailers, their employees and the local communities they serve. Small and medium-sized enterprises (SMEs), which represent the vast majority of retail businesses and jobs, are among the most exposed to these developments. While many have yet to fully seize the emerging opportunities, many are already doing so and are well placed to do it further given their local embeddedness and operational agility. Their capacity to adapt effectively will not only shape their own competitiveness and resilience, but also the broader economic and social vitality of both urban and rural areas. This report focuses on retail SMEs in the European Union (EU), drawing lessons that may also be relevant for other OECD countries.

 

In the EU, the retail ecosystem plays a central economic and social role, contributing significantly to GDP and employment while serving daily over 450 million consumers. As the largest EU industrial ecosystem, it spans retailers, wholesalers and supporting services such as logistics. Retailers and wholesalers alone comprise 5 million businesses, accounting for 11.5% of total value added and employing nearly 30 million people. Most serve local markets, helping to shape the vibrancy of towns and cities of all sizes, in both urban and rural areas.

 

This report analyses the twin transition of retail SMEs across three interconnected dimensions: SME performance, regional and local labour markets, and the transformation of local economic and urban environments. 

 

Chapter 2 examines changes in the EU retail ecosystem, including economic performance, business dynamics, international trade and digitalisation, and introduces new evidence on firm-level digital adoption as well as a cross-country mapping of policy responses. 

 

Chapter 3 explores labour and skills challenges at national, regional and local levels, with particular attention to how the transitions are reshaping employment trends, recruitment gaps, training needs and employee profiles. 

 

Chapter 4 addresses the place-based dimension of retail, analysing how retail SMEs can harness global trends to revitalise town and city centres in ways that support local economies and quality of life, as well as how local governments can help them adapt to ongoing structural changes.

 

To download the full report, visit: https://www.oecd.org/content/dam/oecd/en/publications/reports/2026/01/local-retail-global-trends_6cdf8ae2/55e2edec-en.pdf

 

AB/ANA/01 February 2026 - - -