The Spanish economy emerged from recession in the second quarter of 2010 although the outlook remains uncertain. A full year GDP contraction is expected for 2010 while performance in 2011 will depend on the government’s ability to push through further cuts as well as the recovery of key trading partners.
Consumer confidence has declined markedly as a result of the tougher economic climate. Most mixed goods product categories have suffered spend declines, apart from personal care which has remained more robust.
63 billion (incl. VAT) was spent on key products sold at department stores in 2009. These include apparel, personal care and household goods (incl. electricals). This represents a contraction in recent years with performance well behind growth in all spending.
Spain’s ageing population could be a boost to the sector given older demographics are likely to find the convenience of shopping under one roof appealing while also seeking good quality.
However, with the economic outlook so bleak, the mixed goods sector is expected to suffer further contractions until around 2013. Price competition from both specialists and other non-specialists such as the grocers is also expected to impact on the sector.
El Corté Inglés is the only recognised specialist multiple in the sector. However, this one chain accounts for 60% of sector sales.
The main competition to the market leader comes from specialist retailers in areas such as clothing, health & beauty and home, as well as from hypermarkets.