One year after Russia’s invasion of Ukraine, the retail sector in Europe has displayed unexpected resilience, despite facing soaring inflation rates and a decline in consumer confidence. Fortunately, income growth has partially mitigated the impact of inflation. Notably, robust increases in labor income, mainly driven by strong job creation in France and higher wages in Germany, Italy, and Spain, have bolstered the purchasing power of households. Additionally, the accumulated savings from the pandemic have provided secondary support for consumer spending, with credit playing a significant role only in France and Italy. Nonetheless, it is anticipated that consumption will gather momentum only in the latter half of 2024.