Spanish Holiday Sales May Gain in First Signs Frugality Easing
After five years of belt-tightening, Barcelona taxi driver Francisco Gonzalez is finally able to treat his daughter to an iPad this Christmas.
That Spaniards are taking taxi rides more often offers a glimmer of hope for an economic recovery after Gonzalez’ business shrank 15 percent since 2008. That means pricier presents for his wife and two daughters, dining out more often and trading up to his beloved jamon iberico from cheaper ham.
The iPad “was something I didn’t want to purchase last year as I didn’t feel it was the right timing,” the 58-year-old said after picking up a ride from the city’s train station. “You can certainly see people being more optimistic in the street now.”
Spanish retailers expect the first holiday sales gain since 2006, after the collapse of the nation’s housing market sapped spending, trade association Anged predicts. Spaniards will increase spending related to end-of-year celebrations by 2 percent to 3 percent this year from the same period in 2012, according to Esade Business School forecasts.
Shoppers spent 8 percent more during the early December Spanish holidays of Constitution Day and the Immaculate Conception than last year, a buoyant signal for the rest of the holiday season, according to Anged. Its member companies have hired about 12,000 temporary workers, 5 percent more than last year, to deal with bigger crowds in stores, the group said.
Prime Minister Mariano Rajoy is counting on an improvement in domestic demand to underpin a recovery in the euro region’s fourth-largest economy after a surge in exports helped it emerge from a two-year recession in the third quarter. Economists forecast gross domestic product will also expand in the final three months of the year, the first time there has been back-to-back expansion since 2011.
Seasonally and calendar-adjusted retail sales excluding gasoline have dropped every December since 2006, according to the National Statistics Institute.
El Corte Ingles, Europe’s biggest department-store chain, borrowed a page from U.S. retailers this year with a Black Friday shopping campaign to kick off the season with discounts, unusual for a country where sales usually occur only twice a year. They’ve also got a temporary technology store for the season to lure in more people like Gonzalez looking to shell out for tablets. And Inditex SA (ITX), the world’s biggest clothing retailer, is seeing higher sales in Spain, its chief executive officer said Dec. 11.
Still, in a country where more than a quarter of people are seeking work, not everyone is celebrating.
Pedro Popa, a truck driver from Madrid, has suffered a 40 percent pay cut since 2008 and now earns 1,800 euros a month for his 15-hour shifts, six days a week. The most expensive gift he’ll buy this year is a Calvin Klein perfume for his relatives, he said.
“I have a job and will buy some presents for sure, but the times of big spending during Christmas are over,” said Popa, 27, who earlier this year had to sell his Audi A4 because he couldn’t afford to pay insurance for two cars. He also no longer travels abroad during the holidays like he used to.
For those consumers who have managed to save money during the crisis, it’s time to start spending again this time of the year, said Gabriel Gargallo a 45-year-old Barcelona resident, while standing near the city’s beach on a recent evening.
Gargallo, a bird researcher, said he may spend as much as 1,000 euros on presents such as a computer for his daughter, a purchase he had postponed for several years. He’s also planning a monthlong trip to Namibia.
“Now that we start to see some light at the end of the tunnel, we definitely feel more enthusiastic and spend more,” he said. “We are all a bit tired of the crisis.”