LDDK: Latvia's retail sector enters a period of transformation amid faster growth
Following a downturn in 2023, Latvia's retail trade is recovering with accelerated growth in 2026, though the sector faces shifting consumer habits and mounting competition, says LDDK's Gorkšs.
A representative of the Latvian Employers' Confederation (LDDK), Gorkšs, has described the retail sector as currently going through a period of transformation, combining recovery with new challenges.
From decline to accelerating recovery
After a drop in turnover in 2023, caused by high inflation and reduced purchasing power, the retail sector has been gradually recovering. While growth was moderate in 2024 and 2025, it accelerated in 2026: retail volume in comparable prices grew 4.4% in the first half of the year, with annual growth reaching 7% in July. Non-food trade excluding fuel grew fastest, by 9.6%, including construction materials, tools, ICT equipment, and clothing and footwear.
Shifting shopping habits
Gorkšs noted that as consumer habits change, the retail business model is changing with them. Shopping across multiple platforms is becoming more common, and fast delivery, digital and self-service solutions, loyalty programs, and personalized offers are gaining importance. This is confirmed by data showing that mail-order and online retail turnover in July was 14.8% higher than a year earlier.
Competition and labor challenges
In Latvia's relatively small market, both local companies and international chains compete, while in e-commerce competition no longer stops at national borders. Price alone is not decisive — brand value, customer loyalty, and shopping convenience matter as well, creating particular difficulties for smaller retailers with more limited resources for investing in technology, marketing, and new store concepts.
Gorkšs also pointed to labor availability as a persistent challenge, given the sector's high staff turnover. Beyond pay, flexible working hours, additional benefits, and growth opportunities are becoming increasingly important for retaining employees, while automation and digital solutions help companies reduce dependence on labor and boost productivity.
Gorkšs concluded that retailers' future market position will increasingly depend on their ability to offer attractive deals, optimize operations, and adapt to changing consumer behavior.
