Over the first decade of the 21st century data analyst Mintel predicts a 74 per cent rise in food retail sales, jumping from €783bn in 2000 to an estimated €1063bn by 2010.
During this period, sales will triple in Hungary and double in the Czech Republic as consumers switch from small stores and local markets, preferring a homogenised supermarket format.
Primary cities in these transitional economies are now reaching saturation point and retailers are exploring opportunities further afield in more rural areas, bolstering sales and converting consumer habits.
But at the moment France has the largest food retail sector, worth €190bn in 2005, followed by the UK on €156bn and Germany on €140bn.
"For a market that targets the low growth food sector, food retailers achieve impressive rates of sales progress, though this is mostly because of the development of non-food sales," said Mintel director of retail research Richard Perks.
Dynamic Discounters
According to the report, the discount sector has been the most active in the European food market since 2000, as aggressive market leaders Aldi and Lidl continue to push further out from their Western European home turf.
Due to the size of Central and Eastern European (CEE) towns and the low level of income, these formats are becoming increasingly popular as customers seek cheaper alternatives to famous brands.
Retail analyst for CEE at Planet Retail, Boris Planer, told FoodandDrinkEurope.com: "The big time is yet to come for discounters, there are tens of thousands of villages across the CEE with no modern retailers."
And in Western Europe the discount sector will continue to pressure retailers, forcing supermarkets to increase their offerings of budget private label ranges to maintain their share of sales.
Super-size supermarkets
The report also documents the movement towards larger shop formats, which can capture more sales through extended product lines.
Although most Western European countries already have these formats, there is room for expansion in Austria, Ireland, Hungary and Poland.
Richard Perks said: "Even though food retailing around Europe varies considerably from country to country - from the hypermarkets of France and the UK through the hard discounters of Germany to the small supermarkets of Austria or the Netherlands, each country is seeing a trend towards larger stores."
These retailers can build up non-food sales and draw customers in. And the larger the stores they are able to open, the faster their growth will be, Perks added.
But it is likely that over the next four years competition will increase as companies vie for a piece of the growing multi-billion euro pie.