This is part one of an ongoing series for international brands.
For most brands in Europe and the UK, penetrating the US market represents the ultimate growth milestone.
With annual retail sales surpassing the $1 trillion mark1 (around €847.8 billion or £731.7 billion) in 2025 and forecasts projecting steady growth over the coming years, the American market offers a combination of scale and momentum that only few regions can rival.
Recent industry data and brand outcomes show that UK and EU companies are increasingly targeting the US as a strategic growth market. One British fashion brand rapidly scaled its US customer base by nearly 200%2 and is expanding its retail footprint across major US cities, while other UK digital‑native brands report double‑digit3 US sales growth. Broader market analysis also cites the US as a key international opportunity due to its scale and online consumer base, reflected in cross‑border e-commerce interest among European retailers.4
However, while the prize is enormous, success in the US is far from guaranteed.
What Makes the US Market So Attractive
For EU and UK businesses accustomed to operating in relatively mature and harmonized European markets, the American landscape feels fundamentally different. Three forces define it:
Scale: An immense consumer base exceeding 340 million people,5 representing one of the world's largest unified economic markets.
Spending power: Higher average per-capita spending6 that translates into greater revenue potential compared to most European markets.
E-commerce maturity: Delivery expectations shaped by decades of competition, and more recently by Amazon's relentless focus on speed and convenience.
Recent estimates underscore just how concentrated global e-commerce power has become with the US accounting for roughly 38.2% of worldwide online sales in 2025, just behind China’s 39.2% share and far ahead of other major markets such as Japan, the UK, Germany, and South Korea, each of which contribute only single-digit portions. China’s dominance, however, is driven largely by scale, with hundreds of millions more digital shoppers. By contrast, the US’ strength is rooted in consumer purchasing power. US GDP per capita exceeds $80,000 compared with roughly $13,000 in China on a nominal basis, and even after adjusting for purchasing power, Americans generate about three times more economic output per person.7
This means the US market delivers significantly higher value per consumer, including some of the highest online revenue per capita among major e-commerce economies. For brands, that dynamic means marketing dollars in the US can go further, targeting a smaller but more affluent, higher-converting audience rather than dispersing investment across a much larger, lower-spend base.8
The mechanics of entering the US extend far beyond location and payment processing. While European brands have long differentiated through product quality and heritage, success in America increasingly hinges on operational excellence, particularly in fulfillment and logistics. What was once a back-office function has evolved into a strategic lever that directly shapes customer acquisition, retention, and lifetime value.
For European brands, this is often the hardest lesson to internalize. A compelling product and a polished website are necessary, but not sufficient. US consumer expectations demand not only strong products, but equally strong operations. The most successful brands understand this before entering the market, not after encountering costly setbacks.
The Hidden Complexities That Derail Expansion
Several high-profile EU and UK brands illustrate the challenges of expanding into the US. In 2013, Tesco’s Fresh & Easy exited the US after investing more than $1.8 billion (£1.2 billion at the time),9 unable to compete with entrenched grocery players. More recently, British beauty retailer The Body Shop closed all US stores and ceased operations after filing for Chapter 7 bankruptcy in March 2024.10 UK lifestyle brand FatFace also exited the US entirely,11 shutting all locations amid weak profitability and broader restructuring.
Continental European retailers have also found the US difficult to crack. France’s Carrefour’s late-1980s hypermarket experiment closed by 1993 after failing to adapt the format to American shoppers.12 A Netherland brand Royal Ahold’s acquisition-driven US expansion later unraveled when accounting irregularities surfaced at its American subsidiary, forcing earnings restatements, regulatory scrutiny, and eventually the divestiture of the business.13
Together, these examples reveal how even the most storied European brands can be humbled by the American market. Think of it like a military campaign waged across an ocean wherein the invading force arrives with prestige and ambition, but its supply lines are stretched thin. Inventory, staffing, and brand consistency all have to be managed from thousands of miles away, while local competitors fight on home turf, armed with better market intelligence, established infrastructure, and faster logistics. The decisive battles rarely happen on the sales floor. They're won and lost in these operational realities, long before a customer ever walks through the door.
1. Navigating Tax Jurisdictions
For European brands accustomed to harmonized value-added tax (VAT) regimes, the move to the US state-based tax system represents one of the most significant operational adjustments in international expansion.
In Europe, national VAT rates typically hover around 21–22%,14 applied uniformly within each country. That consistency provides predictability. Businesses understand the rules, reporting frameworks are standardized, and compliance occurs at the national level.
The US operates very differently. Rather than a single consumption tax, more than 12,000 sales-tax jurisdictions exist across states, counties, and municipalities each with its own rates, rules, and product-taxability definitions, and all with frequently changing rates.15 While combined state and local rates averaged about 7.5% as of 2026,16 and far lower than European VAT, the complexity far exceeds the rate differential.
Unlike VAT, which is collected throughout a logistics network and offset at each stage, US sales tax is applied only at the final consumer transaction. That spares European brands from managing tax on business-to-business activity, but it introduces an intricate compliance burden once goods begin shipping to US customers.
In practice, the same product may be taxed in California but exempt in Tennessee. Some states tax clothing; others do not. Digital goods, food products, and services each face different rules depending on location.
| European VAT | US Sales Tax |
|---|---|---|
Rate | ~21–22% (uniform within country) | Avg. ~7.5% (varies by jurisdiction) |
Jurisdictions | One per country | 12,000+ across states, counties, municipalities |
Collected at | Each stage of the supply chain | Final consumer transaction only |
Pricing display | Included in listed price | Added at checkout |
Compliance level | National | State-by-state registration and reporting |
Pricing psychology also shifts. Whereas VAT-inclusive pricing is standard in Europe, US shoppers expect sales tax to appear at checkout. That seemingly small distinction influences conversion rates, merchandising strategies, and promotional messaging.
The concept of “nexus” or the connection triggering a tax collection obligation has also expanded significantly following the 2018 South Dakota v. Wayfair Supreme Court decision.17 For European brands, this means that simply storing inventory in a US fulfillment center can create a taxable presence in that state, even if the company has no other operations there.
Each state where a brand has nexus requires registration for a sales tax permit, regular collection from customers, periodic remittance to tax authorities, and annual reconciliation and reporting. Managing this across multiple states manually is practically impossible.
2. Regulatory Considerations Beyond Taxation
Different product categories are subject to distinct federal regulatory requirements in the US. For example, food and cosmetics fall under the oversight of the US Food and Drug Administration (FDA), electronics may require Federal Communications Commission (FCC) certification, and children’s products must comply with Consumer Product Safety Commission (CPSC) standards. Importantly, the European “CE” marking does not automatically confer access to the US market as separate US-specific approvals are often required.
The same goes for documentation. In the US, customs declarations, country-of-origin marking, and product labeling demand a level of precision that often exceeds what many European brands encounter domestically. Even minor errors like incorrect Harmonized Tariff Schedule (HTS) codes or non-compliant labeling can trigger customs holds, secondary inspections, or requests for correction, delaying clearance and disrupting inventory availability.
These delays often translate directly into added cost. Once cargo exceeds its free time at port, storage and demurrage can run from roughly $75 to $300 per container per day,18 and sometimes far higher depending on the terminal and equipment type. Even modest holds can add thousands of dollars to a shipment, with a 10-day delay alone potentially generating $1,000 to $3,000 in penalties,19 before factoring in relabeling, bonded handling, or expedited re-shipping to recover lost time. More serious compliance issues can result in denied entry or seizure altogether. With US ports ranking among the costliest globally for demurrage and detention, what begins as a minor documentation error can quickly escalate into a material operational expense.
3. Meeting Unforgiving Consumer Expectations
The American consumer mindset differs significantly from European shopping behaviors. US shoppers have been conditioned to expect near-unlimited product selection, highly competitive pricing, and fast, reliable delivery shaped by decades of intense retail competition and, more recently, the Amazon effect.
By comparison, European consumers are generally more accustomed to curated assortments in physical stores, somewhat higher price sensitivity tied to perceived quality and sustainability, and greater acceptance of longer delivery windows when reliability and product quality are assured.20 While European shoppers value quality, brand heritage, and ethical sourcing, they often do not expect the same combination of hyper-convenience, speed, and broad availability unlike their American counterparts.21 This gap in expectations means that brands successful in Europe may need to adjust both their operational capabilities and customer experience strategies to meet US standards.
Much of this difference is structural rather than cultural. Geography, infrastructure, and trade integration shape what “normal” service looks like in each region. Industry benchmarks illustrate how delivery realities differ:
Route / Market Context | Typical Parcel Delivery Time | What Drives the Speed | Implication for Brands |
|---|---|---|---|
UK Domestic | ~1.2–1.4 days22 | Dense geography, short line-haul distances, highly integrated courier networks | Consumers are accustomed to very fast baseline delivery without needing large fulfillment footprints |
Intra-EU Cross-Border (e.g., France → Germany) | ~up to 7 business days (standard services)23 | Harmonized trade lanes, road-based parcel movement, minimal customs friction within the single market | Reliable but not “instant,” speed expectations are moderate and predictable |
UK → EU (post-Brexit) | ~3–5 business days (tracked services, varies with customs)24 | Short physical distance but added border processing | Slightly longer timelines accepted if delivery is consistent |
UK → United States | ~5–12 business days up to 4 weeks for standard tracked services25 | Long-haul air transport, customs clearance, final-mile handoff across a continental market | Delivery speed becomes a strategic decision tied to shipping cost vs. customer promise |
Continental EU → United States | ~5–10 business days typical parcel transit26 | Intercontinental freight plus export/import processing | Inventory staged overseas risks missing US customer expectations |
Meanwhile in the US, research indicates that in 2025, the average delivery speed is at 2.47 days,27 with more than 40% of American consumers expecting delivery within two to three days as a baseline.28 Same-day delivery has likewise become the new normal for most shoppers, with 80% wanting this service and 30% seeking it for free.29
This creates an interesting dynamic for European entrants. Americans are not inherently more impatient than European consumers, but they have been accustomed by domestic retailers to expect certain baseline service levels. Failing to meet these expectations doesn’t just mean lost sales; it means never getting a second chance to make a good first impression.
Amazon alone accounts for roughly 41% of US e-commerce,30 meaning nearly half of all online dollars flow through a single platform that has set the bar for delivery speed, return policies, and customer service. Competing doesn’t necessarily mean matching Amazon’s resources, but it does require understanding what Amazon has taught American consumers to expect.
4. The Returns Reality
With US retail returns approaching $900 billion annually,31 efficient reverse logistics are essential. Fast refunds, simple processes, and local return addresses protect conversion rates and loyalty.
European brands must recognize that, like EU and UK consumers, US shoppers expect convenient, no-cost returns. Emerging practices in Europe such as fees or restrictions on returns, particularly in fast fashion,32 are unlikely to be well received in the US. Restrictive policies, complicated processes, or customer-paid return shipping create friction that can drive shoppers to competitors. To note, more than half of US consumers expect free return shipping,33 making it a baseline requirement for competitive parity.
Additionally, when returns are easy and convenient, 73% of customers are more likely to make repeat purchases.34
5. Regional Fragmentation Requires Local Strategy
The US functions less like a single, uniform market and more like a network of distinct regional economies shaped by different climates, cultures, and consumer preferences. In that sense, it is not unlike the European Union itself. Just as brands in Europe navigate meaningful differences across countries, languages, and local buying habits, success in the US requires recognizing the equally nuanced variation across states and regions. The key distinction is that these differences exist within one regulatory and commercial framework, which can create the illusion of homogeneity even when consumer behavior is far from uniform.
Adapting currency display, sizing conventions, and measurement systems is therefore only the starting point. To gain traction, brands must go further, localizing product assortments, marketing strategies, and operational models to reflect regional demand patterns.
For example, a UK apparel brand may convert to US sizing, but winter outerwear will see stronger demand in the Northeast, while lightweight, breathable fabrics perform better in the Southwest. Marketing must also reflect local context: campaigns that resonate in coastal urban centers may not translate in other regions without adjustment. Similarly, a French organic snack brand that succeeds in health-conscious markets like California or New York cannot assume identical reception in other parts of the country without tailoring its positioning and distribution approach.
Region-specific strategies, spanning assortment planning, inventory allocation, fulfillment networks, and messaging, are essential for EU and UK brands seeking to scale in a US market that is unified legally, yet highly differentiated in practice.
6. Extreme Seasonal Concentration
US seasonality is intense. Black Friday Cyber Monday (BFCM) and holiday shopping frequently account for 30–50% of annual e-commerce revenue,35 with US online sales during Cyber Five (five-day period from Thanksgiving to Cyber Monday) reaching around $44 billion last year.36 By contrast, while these events have grown in Europe and the UK, the impact is smaller and more spread out. In the UK, for instance, the four-day BFCM weekend sales in 2025 totaled about £3.8 billion ($5 billion).37 European shoppers also spread purchases across a longer promotional season and other holiday events.
This highlights that EU and UK brands entering the US must prepare for a compressed, high-stakes seasonal peak in demand that differs fundamentally from European patterns. Without flexible capacity and scalable infrastructure, brands risk losing their biggest revenue opportunity of the year.
7. Volatile Trade Dynamics
Global trade policy has become increasingly dynamic, with tariffs and trade restrictions shifting based on economic and political factors, and recent developments have added uncertainty for EU and UK exporters. Just this year, the US-imposed tariff to the UK and six EU member-countries rose to 25% in relation to the recent Greenland dispute, with higher rates on specific categories such as steel, aluminum, autos, and certain industrial goods.38
At the same time, the Supreme Court’s recent decision39 to strike down a set of sweeping import tariffs underscores how quickly trade rules can evolve, not only through executive action, but through judicial intervention. For brands expanding between the US and EU/UK, this reinforces a critical reality that sourcing, pricing, and margin models must be built for volatility, as today’s duty environment can shift in either direction with limited notice.
These tariff structures directly impact product economics considering that when duty rates rise for particular categories or countries of origin, brands must adjust pricing, reassess sourcing strategies, or absorb margin pressure. The speed and effectiveness of these adjustments often determine whether brands maintain market position or lose competitive ground in the US.
Why Infrastructure Matters More Than You Think
The path to US market success for EU and UK brands requires a fundamental strategic reorientation. While product differentiation and brand heritage remain important, they are no longer sufficient in a market where operational excellence has become the primary battleground.
European brands must acknowledge that entering the US is not simply an extension of their existing playbook. It demands treating logistics, fulfillment, and customer experience with the same strategic rigor traditionally reserved for product development and marketing. The most successful international entrants recognize this reality early, building operational capabilities before scaling rather than attempting to retrofit infrastructure after market entry.
This means carefully evaluating regional demand patterns, understanding the true cost of compliance across multiple tax jurisdictions, preparing for extreme seasonal concentration, and establishing reverse logistics capabilities that meet American return expectations. It also requires accepting that tariff volatility and regulatory complexity are ongoing operational realities, not one-time hurdles to overcome.
For most EU and UK brands, building this infrastructure independently represents an enormous capital investment with significant execution risk. The alternative, which is partnering with experienced US fulfillment providers, offers a proven pathway to market entry that balances speed, flexibility, and cost efficiency. The right fulfillment provider brings not just warehouse space, but established regional distribution networks, tax compliance expertise, customs clearance capabilities, and the technological infrastructure necessary to meet American delivery expectations from day one. And when tariffs or policies shift unexpectedly, your partner must have the capabilities and expertise to get your brand around these volatile changes no matter what.
However, not all fulfillment partnerships deliver equal value. Selecting the right partner requires understanding which capabilities truly matter for your specific category, customer base, and growth trajectory.
In Part 2, we’ll examine the critical criteria EU and UK brands should evaluate when choosing a US fulfillment partner.
