Why localisation drives retail success in CEE

Why local sourcing is critical to winning in Central and Eastern Europe

Central and Eastern Europe (CEE) continues to attract retailers seeking growth beyond more saturated Western markets. Strong urbanisation, rising incomes, and ongoing modernisation of retail infrastructure are creating compelling expansion opportunities. Romania alone has seen the rapid development of grocery retail, with the grocery market forecasted to hit RON 228.2 bn (USD 50.5 bn), growing at 4.8% CAGR 2025-2030, outperforming the European average.

However, whilst many retailers approach the region as a scale opportunity, this framing risks overlooking a more fundamental challenge in building local credibility. In CEE markets, growth is not just about footprint or price, it is about relevance. And increasingly, that relevance is shaped by how effectively retailers embed local sourcing into their offer.

Growth markets are not blank canvases

CEE markets are often described as underpenetrated, but they are far from underdeveloped in consumer expectations. Food, in particular, carries strong cultural significance, and shoppers bring deeply ingrained preferences to modern retail environments.

This is particularly evident in Romania, where shoppers regularly rank first in the EU for the percentage of household income spent on groceries. This level of spend reflects not only economic factors but also the central role of food in daily life. As a result, purchasing decisions are more considered, and expectations around quality, freshness and origin are heightened.

For retailers entering or expanding in the region, this creates a tension: while growth prospects are strong, the margin for misreading local expectations is narrow.

Local sourcing acts as a shortcut to trust

In many CEE markets, local sourcing plays a critical role in shaping perceptions of quality and trust. Local sourcing goes far beyond an operational decision, it communicates freshness, safety and authenticity.

Consumer data in Romania illustrates this clearly. More than half of shoppers (53%) say they prefer to buy local food even if it costs more, highlighting the strength of local preference despite ongoing price sensitivity.^* At a regional level, research shows that consumers across CEE are simultaneously price-conscious and discerning, seeking products that balance value with quality, health and sustainability.

In Hungary this expectation is similar with retailers continuously expanding and updating their local product selection. SPAR Hungary’s local sourcing programme, Regional Treasures, continued to grow in 2025, with 569 products from 139 Hungarian small producers and businesses available in SPAR stores across the country. This continued commitment to locality, and its subsequent success demonstrates how local sourcing wins the trust of Hungarian suppliers.

In this context, local sourcing provides reassurance. It reduces perceived risk and aligns with consumer priorities around food quality and transparency, particularly in markets where trust in supply chains may be more variable.

^{*PwC's Voice of the Consumer Survey Romania 2025}

Cultural relevance shapes purchasing decisions

Retailers can underestimate the emotional and cultural weight attached to food origin in CEE. Preferences for local products are not niche or limited to premium segments, they are mainstream and widely embedded across shopper groups.

Historical and economic context plays a role here. Many CEE economies have undergone significant transformation over the past three decades, contributing to a strong sense of national identity and, in turn, support for domestic industries. In food retail, this translates into purchasing behaviour.

At the same time, shopper priorities are changing. Polish shoppers, for example, are increasingly discerning, balancing price sensitivity with expectations for quality, health and sustainability. This creates a more complex dynamic: local products are not simply preferred, but expected to meet rising standards.

Winning in CEE requires market-by-market adaptation

Success in CEE depends on recognising that the region is not a single consumer market but a collection of distinct shopping cultures. Poland, the region's largest e-commerce market, is characterised by digitally mature consumers who expect seamless online experiences, fast delivery and local payment options such as BLIK. Hungary combines strong price sensitivity with high expectations for customer service, with shoppers placing significant value on responsive support and familiar purchasing journeys. Romania presents a different dynamic again, where trust, product origin and local relevance play an outsized role in purchasing decisions.

Retailers that tailor their proposition to these local nuances, rather than applying a standardised regional strategy, are far more likely to build long-term customer loyalty and market share.

The growth potential across Central and Eastern Europe remains compelling, but growth alone should not be mistaken for a blank slate. Consumers across the region are increasingly sophisticated, balancing value considerations with expectations around quality, transparency and cultural relevance. In markets such as Romania, local sourcing serves as a powerful trust signal, while elsewhere success may hinge on payment preferences, service standards or digital convenience. The common thread is the importance of localisation.

Retailers that invest in understanding the distinct expectations of each market, rather than viewing CEE as a homogenous region, will be better positioned to build trust, differentiate their offer and capture sustainable growth in one of Europe's most dynamic retail landscapes.