Today on July 16th, Spain’s King Felipe VI held a commemoration in Madrid to honor the nearly 30,000 Spaniards who have died from COVID-19. This comes one day after 160,000 people in Lleida, Spain were ordered to go back into lockdown for the next 15 days, forcing restaurants and bars to shut down again.
This is frustrating consumers because the country’s national lockdown ended on June 21st, but a rise in new COVID-19 cases is taking its toll on Spain, which is currently the eighth most-impacted country by the pandemic.
As a result, Spain’s retailers are facing a long recovery phase. Many analysts predict that this recovery will be harder on retailers than the Great Recession of 2008.
Retail sales in Spain are expected to fall by 12.7% this year, the biggest decline (down from $43 billion to $297.50 billion) in Western Europe. Unemployment is expected to go up to 18.9%, the second highest in Europe.
How long might it take for retail to get back on track? Analysts are cautious. Looking back at the Great Recession, most markets took one year to get back to pre-recession levels. But analysts anticipate the COVID-19 recovery will take at least two years.
The incredible thing is that retail online purchasing is way up in Spain (against the norm of pure e-commerce generally outperforming retail e-commerce), but that doesn’t necessarily offset the brutal hit to brick-and-mortars. Overall, Spain’s e-commerce is expected to grow around 22.9%, perhaps the fastest European country for the second year in a row.
With retail taking a huge hit, it’s surprising just how badly pure e-commerce in Spain is performing, especially when you compare it to retail e-commerce.
While pure play is on a steady decline, retail e-commerce is mostly doing very well, staying above 0% since early April. Back in 2019, e-commerce in Spain had been growing at a double-digit rate every year.
But now after months of the pandemic, CCInsight data shows that Spaniards would rather buy online from a retailer they know and trust rather than a pure e-commerce brand.