Spain: The Spanish consumer paid more for less in 2018

According to Florencio García, Iberia Retail Director at Kantar WorldPanel, “Spanish households are still focused on price, but are willing to pay more for those products that provide them with a differential value”. This trend is especially noticeable in packaged food, despite 0.6% lower consumption. Spaniards have spent 1.9% more on this section compared to a year ago. In other words, the price consumers have paid for their basket of packaged food products has risen by 2.5%.

This increase is largely due to a change in the product mix and a search for greater added value in each purchase, either with more premium varieties or with healthier options. In the same vein, and despite its significant price premium, packaged eco/organic food has experienced a growth of 19% compared to 2017.

García stresses that, since the economic recession, 2018 has been the first year in which Spanish consumers have been willing to pay more for quality or convenience products.

The total (in home + out of home) market value in Spain is around €100 billion.

Another important factor affecting the consumption evolution, according to Kantar, is that the lines between consumption and purchase options are becoming increasingly thin. The Spanish consumer more and more has additional options to buy food and also performs meals in a more unstructured way, pushing consumption out of home, which already accounts for more than a third of the expenses and reaching a 77% penetration.

The section most responsible for the limited growth of the FMCG sector in fresh products. Spaniards have bought around 2% less, despite spending remaining practically constant (-0.2%).

As for the channels preferred by the Spanish to buy fast-moving consumer goods, super and hypermarkets have continued to add market share to the detriment of the traditional trade, mainly in fresh products which have become the main focus of modern strategies.

E-commerce is continuing to progress slowly in the Spanish FMCG market. It has reached a share of 1.6% of sales, gaining 0.1 points on 2017, but was the only channel to add shoppers. The obstacle to further growth in Spain is the high number of stores, coupled with the difficulty in selling fresh products through electronic commerce in a country that is so linked to these products.

Mercadona and Lidl, the only ones of the national Top 6 to gain market share.

In this context, Mercadona and Lidl as well as the regional supermarkets have been the top winners of 2018, with share gains between 0.5 and 0.8 points. What has been lost by Dia (0.7 points) has been gained by the two mentioned chains thanks to the opening of new stores.

Mercadona has reinforced its position as Spain’s leading retailer in 218, with a rise of 0.8 points, closing the year with a 24.9% share. The Valencia-based company mainly relays on fresh products and the diversification of its own brand goods.

In 2018 Lidl became the retailer with the second highest number of shoppers, which has increased its market share by 0.5 points to 4.8% of the market value. For Kantar, the “smart discount” model seems to have consolidated itself in the Spanish market, given that Aldi gained more shoppers than any other retailer in 2018.

Dia remains as the third largest retailer with a 7.5% market share (-0.7%). Its fall is primarily due to its more traditional store model, damaged by the increase in competition.

Carrefour captured 8.4% (-0.3%) of the market share. Spain second-biggest retailer has been hit by the drop in visits to hypermarkets in general.

Florencio García concludes: “Consumers will have the option of buying take-away food at a supermarket, ordering food from a restaurant or having their daily purchase delivered to their home the same day they order it. They will alternate and explore all these options, opening up an interesting panorama in search of growth in value that overcomes the burden of the population slowdown”.

Source: Alimarket