What: BCG analysis reveals 17% of European companies require transformation and 6% face restructuring pressure, putting USD 300 billion in GDP and 3.5 million jobs at risk, with consumer and retail among the most vulnerable sectors.

Why it is important: The scale of transformation pressure, affecting millions of jobs and hundreds of billions in GDP, represents the most significant challenge to European retail since 2009, requiring immediate strategic responses from business leaders.

These are among the findings of the third annual Transform and Special Situations Index from Boston Consulting Group (BCG), titled The USD 300 Billion Reason Why CEOs in Europe Need to Focus on Transformation. The report examined the operational performance and financial stability of more than 1,700 European public companies. Germany bears the heaviest burden, particularly in automotive, chemicals, and consumer & retail sectors, while Italy and the Nordics have experienced sharp increases in transformation pressure. France and the UK show more stability. The consumer and retail sector emerges as one of four most at-risk sectors, facing significant margin pressures and consumer spending cutbacks, with potential tariff impacts threatening up to USD 11 billion in sector output. CEO priorities, revealed through AI analysis of Q1 2025 earnings calls, focus on M&A, market opportunities, and revenue growth, though experts warn that without comprehensive transformation strategies, companies remain vulnerable to future disruptions.

IADS Notes: The European retail sector's distress has reached critical levels in 2025. As reported in June, consumer confidence hit a three-year low with 54% of Europeans expressing economic pessimism. Geographic variations show German retailers particularly struggling, while the UK and France demonstrate relative stability. The sector's response has evolved significantly, with April seeing the implementation of geopolitical nerve centers to manage trade complexity, while March data revealed retailers negotiating with suppliers to mitigate projected USD 640 billion in additional import costs. This transformation pressure is evident in consumer behavior, with only household essentials maintaining positive net spending growth.

Europe’s corporate stress test: 1 in 6 firms under transformation pressure, 6% at risk of restructuring