Crisis in Spain forces distributors to engage Third World tactics | RetailDetail

Crisis in Spain forces distributors to engage Third World tactics

Crisis in Spain forces distributors to engage Third World tactics

As the economic crisis in the South of Europe keeps getting worse, its consequences too continue to gain visibility. Spain seems to be the next victim: its retail sales went down 10% last month and international distributors now adopt tactics they developed for sales in the Third World.

22 consecutive months of sales decrease

According to the Spanish Statistical Institute, the 9.8% drop was just the latest in a series of 22 consecutive months in which the Spanish retail sector shrank. Unemployment is higher than ever (more than one in four adults currently has no job), so many Spaniards struggle to pay their interests – which in turn weakens the Spanish banks.


This forces the Spanish government to borrow money to support the financial sector, raising the national debts and increasing the need to cut spendings... which only adds to the lack of consumer confidence. According to Nielsen's survey, Spanish confidence - though being one of the lowest in the world - was still higher than six other European countries in the first three months of 2012; but a heavy crash can be expected for the second quarter.


Third World tactics

Lower consumption and growing poverty force international retailers to engage in strategiesthey adopted for emerging markets, as the Wall Street Journal reports. Unilever is trying to produce alternative versions of its brands for these countries, which are almost half as expensive as the normal ones.


“With around one in five people now officially living beneath the poverty line in countries like Spain and Greece, it's critical that we find new solutions to ensure that people across the region continue to enjoy our brands, while keeping in control of their household budget," says Matt Close, Unilever's head of European marketing.


Swiss Nestlé is also struggling to stay in the favour of southern consumers. Using cheaper versions and smaller packages , the brand hopes to be able to fight off the cheaper private labels, which are growing ever more popular.

Questions or comments? Please feel free to contact the editors

H&M opens web shop on Tmall


Swedish H&M has opened a web shop on Chinese platform Tmall. The company has been through a difficult year with a turnover drop, and the cooperation with Alibaba's platform is a first step following its new strategy that focuses more on online sales.

Guess' turnover grows, but company suffers loss


Fashion company Guess has managed to boost its turnover in 2017, but it did suffer a near 8 million dollar loss compared to the nearly 25 million dollar profit from 2016.

C&A expands web shop to 11 new countries


C&A has introduced its webshop to another eleven countries, instantly more than doubling the range of its online activities. Denmark, Finland, Greece and Sweden are completely new markets, where the chain doesn't have physical stores yet.

New Esprit CEO hails from New Look


Fashion chain Esprit will get a new CEO: Jose Manuel Martínez will leave the company and pass on the baton to Anders Kristiansen. New Look’s former CEO has to bring growth to Esprit, particularly through ambitious plans for China.

Dior exchanges Belgian CFO for British one


After eleven years as Dior Homme’s Chief Creative Officer, Belgian Kris Van Assche is to leave the fashion label to find new challenges. British designer Kim Jones will replace him.

Suitcase brand Rimowa cancels all dealer contracts


Suitcase brand Rimowa, part of luxury group LVMH since 2016, has stopped all of its dealer contracts. It wants to initiate a new procedure soon and only a fraction of the current dealers will get a new contract.

Back to top