Retail is one of the most restrictively regulated business sectors in the EU, according to the updated Retail Restrictiveness Indicator (RRI), unveiled by the European Commission.
The indicator includes authorisations required for opening stores and local operational restrictions specific to the retail sector.
There are more rules applicable to retail, but these also apply to other sectors, including, among others, product safety, corporate sustainability due diligence, food regulation, and waste and packaging.
According to EuroCommerce, this means there is enormous potential to reduce regulatory burdens and increase competition and innovation across the sector.
'Facing A Challenging Environment'
Christel Delberghe, director general of EuroCommerce, the association representing retailers and wholesalers in Europe, stated, "The publication shows that the retailers’ environment has remained the same or even deteriorated since 2018, when the indicator was established. Retail provides an essential service, is facing a challenging environment with high inflation and has the potential to support the EU’s digital, sustainability and skills goals.
"The RRI provides a useful tool to point to restrictions that stand in the way of the sector’s digital and sustainability transformation and longer-term competitiveness," Delberghe added.
Europe has around 3.5 million retailers, and provides 16.5 million jobs, especially to young people.
EuroCommerce has observed that in the past year, Member States have imposed more legal requirements, political pressure and increased inspections across the EU to force retailers to reduce food prices, or to keep them low.
Regulatory Costs
According to EuroCommerce, this will increase the burden of regulatory costs, while a recent study by the association published in collaboration with McKinsey showed that margins in food retail have decreased.
With this in mind, EuroCommerce has urged the Commission, Member States and the European Parliament to use the RRI to assess how regulatory burdens in the sector can be reduced.
It will help foster competitiveness and innovation and deliver more choices and affordable prices to consumers.
The association has welcomed the reference to RRI in the country reports of the European Semester Spring Package and urged the Commission to consider them in the future in the country-specific recommendations.
The sector looks forward to the RRI being one of the measures for the upcoming transition pathway, which will act as a roadmap for the retail and wholesale eco-system, EuroCommerce said.
© 2023 European Supermarket Magazine – your source for the latest retail news. Article by Dayeeta Das. Click subscribe to sign up to ESM: European Supermarket Magazine.
