Gabriel Solar, Founder, Yestis
Speaking from Barcelona, Gabriel Solar, whose company represents major international brands in Spain, prefaced his remarks on the Spanish market by addressing current conditions. Before Covid-19, Spanish consumers purchased mid-range products, but the pandemic conditions caused households to reduce purchasing and shift toward lower-priced goods. Only households with healthy financial standing can buy products at the upper levels of the market.
Demographic and Economic Summary
Spain’s 47 million residents live in 19 million houses with 2.4 people per home. An additional 6 million homes are secondary homes, owned by Spanish citizens and international tourists. The main cities are Barcelona/Catalonia at 7.7 million, Madrid with 6.7 million, coastal cities Valencia with 5 million, Malaga 1.7 million, Sevilla 1.9 million and the Basque Country with 2.2 million. The Balearic Islands with 1.1 million and Canary Islands with 2.2 million complete the spheres of influence.
Current unemployment stands at 15% but is forecasted to reach 30% or more due to Covid-19. In a ranking of 13 European countries, Spain’s minimum salary for professionals trails at the bottom level. Conversely, Spain tops the list of European countries for non-resident overnight stays. Tourism employs 14 million people, contributing 11% to the GDP. The number of tourists in 2020 is expected to fall by 80%.
Housewares Retail Sales
Although there is no official published data on housewares sales, Solar presented research that listed channels of trade, revealing food mass merchants hold a 40% market share, followed by department stores, traditional stores, large specialty stores and alternative distribution. Online sales are expected to grow from 12% to 20% this year. Retailers deal directly with brand suppliers for 75% of the merchandise and 25% through wholesalers and distributors.
He listed major grocery chains (hypermarkets and supermarkets), discounters and cash and carry retailers, as well as their store counts. While discussing each channel, such as discounters, electronics, hardware, home décor and specialty stories, he identified store names and their housewares product categories. The market is dominated by local and regional stores, but also includes internationally known names such as Carrefour, Aldi and Costco, which sells to restaurants and commercial purchasers. Solar advised suppliers that private label could be a path to enter some of the larger retailers. Other store types, representing 3-4% of the market, include Chinese shops, which are growing in major cities and offer low-priced goods, and Itinerant markets that move daily from town to town and sell discontinued and low-end products.
Wholesalers and Distributors
The key to success for U.S. brands in the EU is to work with a distributor organization to manage stock and logistics for quick delivery. Solar also outlined the HORECA channel: hotels, restaurants, cafés and camping operators, which can provide opportunities for cookware, tabletop and furniture categories. He identified key players and their membership counts.
After his presentation, Solar answered questions from the audience.
- How has retail been impacted by Covid closures? Limited store openings.
Any surprising opportunities? New, innovative, distinctive products are always welcome.
- Are street markets growing? Traditionally, these markets sold food then added clothing and textiles. Low price point, overstocks. We don’t expect growth here.
- Consumer perceptions of U. S. brands? It’s important for foreign brands to consider Latin tastes. Must understand Mediterranean culture. U.S. brands are considered fine quality.
- Amazon and ecommerce. No public data available. Spanish consumers are feeling more confident about payment security online and convenience of returns.
- Recent product category successes? Food preparation tools, kitchenware, bakeware. As in other countries, Spanish consumers are cooking more at home, and TV chefs are demonstrating products and inspiring more experimentation.
- Consumer perception of sustainable products? Yes, younger consumers are more sensitive to eco-products than older segment. As the incomes of younger consumers grow, this interest will grow.
For more information on the Global Forum presenters, contact Lori Szudarek, IHA senior manager, member and international buyer relations, at +1.847.692.016 or email Lszudarek@housewares.org.