Croatian grocery retail continued to expand in 2025, but the market is increasingly defined by slower nominal growth, tighter margins, rising operating costs and a widening gap between operators that generate productive growth and those that rely primarily on network expansion.
According to the Croatian Competition Agency (AZTN), the 41 retailers included in its annual market study generated EUR 8.93bn of grocery retail revenue in 2025, up 6.2% YoY. Momentum, however, is clearly slowing compared with the inflation-driven growth rates recorded earlier in the decade. Food and non-alcoholic beverage prices increased by an average of 5.1% in 2025, meaning price effects still accounted for a substantial share of industry growth, while retail volumes kept expanding, albeit far more slowly than nominal turnover. In other words, Croatian consumers were still spending more, but the post-pandemic combination of inflation and exceptionally strong nominal consumption growth is gradually running its course.
Croatian grocery retail revenues (EURbn, YoY growth %)
Source: AZTN, InterCapital Research
In terms of store formats, the market should be viewed from two perspectives – revenue and store count. Larger formats – supermarkets and hypermarkets – generated 72.6% of 2025 revenue (53.0% and 19.6%, respectively), up from 72.0% a year earlier. Logically, however, they account for less than a fifth of all outlets. Self-service stores (41.6% of outlets) and small stores (39.3%) dominate by outlet count, as they provide proximity, urban coverage and seasonal flexibility that large formats cannot replicate. However, store economics matter more than the sheer number of locations, as recent developments around Studenac, the most aggressive consolidator of Croatian proximity retail in the past several years, clearly show. The market implications of Studenac’s pre-bankruptcy proceedings remain to be seen, but whichever way the restructuring goes, there will be locations, employees and market share up for grabs.
Store count vs revenue share by format (2025)
Source: AZTN, InterCapital Research
This naturally brings us to market concentration, which AZTN still classifies as low to moderate – two decades of consolidation have not made Croatian grocery retail a concentrated market. Moreover, most of the consolidation is taking place in the tail, largely through regional M&A.
Croatian grocery retail market concentration
Source: AZTN, InterCapital Research
The fragmentation of Croatian retail is also evident in the market shares of the top 10 players, who differ mostly in geographic coverage, store format and/or business model rather than in total market share.
Croatian grocery retail market shares
Source: AZTN, InterCapital Research
Another distinctive feature of the domestic market is its regional variation in demand. The City of Zagreb generated EUR 1.51bn of grocery turnover in 2025, followed by Split-Dalmatia County at just under EUR 1.2bn, while Primorje-Gorski Kotar, Istria, Zadar, Zagreb and Osijek-Baranja counties round out the seven largest markets, which together account for 65.1% of national turnover. This regional fragmentation is one reason why national market shares alone do not fully describe competitive intensity.
Croatian grocery retail concentration by county
Source: AZTN, InterCapital Research
Market shares by county
Source: AZTN, InterCapital Research
The key structural forces shaping the domestic retail industry include the aforementioned consolidation of the regional tail, discounter pressure, inflation, a tight labor market, tourism and regulatory headwinds, as well as the growth of private labels, loyalty programs and e-grocery.
Household final consumption & food price level (EU-27 = 100, 2025)
Source: Eurostat, InterCapital Research
Discounter pressure is visible in the market-share stickiness of Schwarz Group’s Lidl and Kaufland, as well as in the entry of Eurospin and Action into Croatia. However, this can also be partly explained as a consequence of long-standing inflationary pressures, especially in food prices. A fragmented market, suboptimal logistics, net food import dependency, relatively high VAT rates, tourism seasonality, low unemployment combined with strong wage growth and other factors all help explain why Croatian food price levels sit above the EU median, while most other price categories place the Croatian consumer at or below roughly 80% of EU levels.
Enter the government. High food prices are fertile ground for populist measures and an easy target for interest groups and the electorate alike. This is evident in the Trade Act’s Sunday-trading restrictions, the broader range of goods eligible for reduced VAT rates, administered price caps, reference prices and the overall public vilification of retailers, with many of these interventions partly driven by the consumer boycotts of early 2025. Although such measures rarely have a lasting impact and are seldom a sustainable solution, the current deflationary trend in Croatian food prices suggests they have had an effect. Moreover, gross margins across all food categories declined in 2025 as retailers sought to avoid losing market share and alienating shoppers.
Gross margins by product category (2025)
Source: AZTN, InterCapital Research
To sum up, Croatian grocery retail remains fundamentally attractive: household consumption is supported by rising real wages, tourism adds an unusually large seasonal demand layer, and the market still offers room for consolidation. But the “easy” part of the post-pandemic growth cycle, characterized by passing inflation through to nominal revenue, is fading. The difference between strong and weak operators will increasingly come down to store productivity, procurement power, logistics density, labor efficiency, balance-sheet capacity and disciplined capital allocation. Studenac’s upcoming restructuring will cast some uncertainty and risk aversion over the market as a whole, but it will also present an opportunity for bolder players – even if capital providers become more selective about what kind of growth deserves to be financed.