Bridging Europe’s Digital Divide: Macro-Digital Preconditions for Sustainable LLM Adoption in Retail

The deployment of large language models (LLMs) in commercial environments depends critically on the availability of robust digital infrastructure, scalable computing resources, and mature cloud architectures. This study examines how macro-level digital infrastructure, in particular cloud computing adoption, conditions the ability of the European retail sector to deploy and benefit from large language models (LLMs). Using a country-year panel of EU member states from 2017 to 2023, we estimate fixed-effects regressions to quantify the association between enterprise cloud use and retail trade volume growth, and implement an event-study design to explore dynamic responses around changes in cloud uptake. The results show that increases in cloud adoption are significantly associated with higher retail trade growth added and productivity, with especially strong effects in emerging Eastern European markets. We identify a digital threshold of around 20% of enterprises using cloud services, above which the marginal impact on retail performance becomes notably larger. These findings highlight cloud infrastructure as a key enabling condition for LLM-enabled retail applications and inform EU digital and industrial policy targeting regional digital disparities.