Retailing in Spain 2007

Verdict Research: Spain, the fifth largest retail market in Europe, has enjoyed strong growth over the past five years and continues to outperform. Unsurprisingly it is attracting the attention of retailers from across the rest of Europe. But with interest rates rising and uncertainty surrounding the property market, the question is how long can the consumer boom continue?



Report Highlights
Spain has enjoyed a period of outstanding retail growth since 2002. It has significantly outperformed its Western European peers, delivering growth more comparable to new EU member states. Spain was the second largest contributor to EU retail growth over the past five years, behind France However, expect the favourable economic conditions that have fuelled this growth to diminish. In particular we expect higher interest rates to hinder spending growth and act as a further brake on the already shaky housing market Despite stresses on the economy and the impact this is likely to have on retailers, we still expect the Spanish retail market to outperform peers over the next five years. Investment in new space and further consolidation of the market stand to boost demand. We also believe that there is significant latent demand among younger Spanish consumers.
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VERDICT VIEW 2
CATALYST 2
SUMMARY 2
ANALYSIS 4
The past five years have been characterised by strong conditions to fuel retail growth 4
Key Market Drivers 4
Market Size 5
Growth Outperforms EU25 Between 2001 and 2006 6
Price wars continue to impede grocers potential 8
Grocers Share of Retail Spending Continues Decline… 8
Price Agenda Dominates Market Share Battle 10
Home sectors have underpined non-food growth but exposure to fragile housing market could present issues 12
Home-related Sectors Achieved Strong Growth Over Past Five Years 12
Challenges Ahead for Home-related Sectors as Economic Outlook Weakens 16
Innovation among clothing players has done little to stimulate domestic market growth 17
Home of Fast Fashion 18
Outlook for Clothing 18
We believe the Spanish retail boom has passed its peak but siginificant opportunity remains 19
Market Drivers 19
Market Inhibitors 20
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Table 1: Key market drivers – retail in Spain 2001-2006 5
Table 2: Spanish total retail expenditure 2001-2006 6
Table 3: Spain grocery retail snapshot 2001-2006 10
Table 4: Leading players in Spanish grocery market 2006 11
Table 5: Spain home markets expenditure 2001-2006 13
Table 6: Spain electricals retail snapshot 2001-2006 14
Table 7: Spain furniture retail snapshot 2001-2006 15
Table 8: Spain DIY retail snapshot 2001-2006 16
Table 9: Spain clothing retail snapshot 2001-2006 18
Table 10: Key market drivers – retail in Spain 2006-2011 20
Table 11: Key market inhibitors – retail in Spain 2006-2011 21
Table 12: Spanish total retail expenditure 2001-2006 and forecast to 2011 22


Figure 1: Index of Spanish retail growth vs EU25 and new member states 2000-06 6
Figure 2: Value change in retail expenditure 2006 on 2001 7
Figure 3: Grocers sales as a proportion of total retail spending 2001-2006 8
Figure 4: Major factors influencing home retail markets 2001-2006 and forecast 2006-2011 16
Figure 5: Five year forecast retail growth among leading EU nations 2006-2011 22
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