Is there a supermarket bubble in Spain?
Spain is one of the European countries with more shops per capita. Currently there are 3.4 stores per 1,000 inhabitants compared to the European average of 2.6. Supermarket chains live a boom not to lose market share.
It is also the country with the most formats. In in UK or France, hypermarkets predominate, in Spain there is a wide variety: 19% of its commercial surface belongs to less than 400 m2 establishments, another 19% are stores of 400 to 1000 m2, 38% of the stores have from 1000 to 2500 m2 and there are 24% of more than 2500 m2 .
For Florencio García, of Kantar WorldPanel, "we're walking towards a bubble of stores", who adds that "if the population does not grow, there will be no demand to satisfy so much supply".
"Between 2008 and 2017, the commercial area has grown by 19% while sales have dropped by 2%", according to Asís González, from Nielsen. "The sector turnover has grown, which means that we buy less quantity of things but we spend more on them".
According to Florencio García, there is "a direct relationship between store openings and the market share gain, which is why the chains do not stop opening spaces, to get more customers". "Even Mercadona and Lidl have changed their location strategy and are now in central districts in the big cities".
Some experts talk about the supermarket bubble, although they explain that, unlike other sectors such the real estate, this one cannot explode. "Even if there are more stores than before and we consume less, the chains continue to sell and their stores are still profitable", according to Kantar. That is partly because "the chains have got customers who previously bought in specialized stores".
For Nielsen, these neighborhood shops had a 40% quota in fresh produce 10 years ago; now, it is 25%. "The bubble does not collapse because there is a customers' transfer, the chains are attracting the traditional stores' customers".
In addition, "the sector endures because more innovation is bought", Asís González assures. "Chains obtain more profitability with the sales of product categories related to health, ready-to eat dishes and the premium range as well". The market is being regulating itself. "There are adjustments in all formats, there are openings but not profitable stores are also closing down".
Source: El Mundo