Tormented by rising unemployment and a “triple-dip” recession, the people of Spain are spending less than ever on cars, cigarettes and clothing. With 6 million Spaniards out of work, clothing sales in Spain sank 8.6% this year, having fallen for the seventh consecutive year.
Budget fashion chain Blanco is one of many Spanish companies bearing the brunt of the consumer cutbacks. Last week, Blanco–which operates some 300 shops in 27 countries–announced that it had filed for insolvency, explaining to the press that the economy “has touched consumer spending and credit markets very specifically.”
Spain has yet to recover from the implosion of the housing market in 2008, which cost millions of Spaniards their jobs. Spain’s unemployment reached a record 27% this year, and the government has predicted that unemployment will remain above 25% until 2016.
Celia Ferrero, vice president of ATA, a small business association, told Agence France-Presse that Spain has lost some 47,000 small business, and the half a million jobs they created, since the beginning of the recession. “It is a very serious situation,” she said.
The Spanish government has been partially blamed for the slow-to-recover economy, especially after a series of spending cuts and tax hikes designed to reduce Spain’s deficit. That said, the government approved a plan on Friday which would simplify and ease the loan acquisition process for retailers, and to make it easier for retailers to sell their goods online.
Speaking with Agence France-Presse, Jose Luis Nueno, a management professor at Madrid’s IESE Business School, predicted that Spanish retail sales could rebound in 2014, but are unlikely to return to pre-recession levels. “We will not return to the level of consumer spending that we had before,” he said.