Retailers and suppliers are bullish about growth prospects in central and eastern Europe, according to retail analyst IGD.

Some 88% of leading grocery industry executives in the region surveyed by IGD for its latest report - Unlocking Eastern Europe's Potential - said they expected total growth to exceed 5% this year, with 17% of respondents projecting total growth in excess of 25%. Russia, Bosnia, Serbia, Turkey and Ukraine were cited as promising markets, with many respondents stating they expected growth of higher than 25% in these countries.

Russia was singled out because it had a strong economy, a fast-growing middle class and a relatively fragmented market.

But the report also said the gap in living standards between eastern and western Europe would not close until 2025 - and warned that retailers and manufacturers who failed to react to differences between consumers within individual countries and across the region would struggle.

"A one-size fits all approach to the eastern European consumer is no longer appropriate," said report author Cecile Riverain, senior business analyst at IGD. "An increasing number of consumers are prepared to pay more for premium products."