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Optimistic forecast for the holiday campaign

José M. Alvarez @jmalvarez60

Spanish consumers are once again optimistic this Christmas and are heading into the holiday season in a more festive mood than in the last few years, according to several market studies and forecasts being released.

According to Deloitte's "2015 Christmas Consumer Spending Analysis", this optimism is being driven by the increase in funds available for gifts, travel and leisure; the decline in the number of Spaniards who will take out a loan to cover costs during this holiday season; and the decline in the percentage of secondhand sales, among other factors.

This year, each Spanish household will spend approximately 684 euros during the holiday season, almost 10% more than the figure forecast for 2014. However, it's likely that the "emotional factor" will lead consumers to spend more than they expected at the last minute, as occurred last year.

Stability and confidence for more rational and practical consumer

This more optimistic view of the future will also lead to a slight change in Spaniards' consumption patterns, as they will gradually renounce certain habits acquired in recent years, such as purchasing secondhand items and seeking loans to cover the costs of the holiday period.

However, it's important to note that the crisis of the last few years has had an impact on consumers, who have become more rational and practical, with the result that the search for the best price, sales and promotions, the creation of a spending budget, and the use of loyalty cards will remain very important. According to, Victoria Larroy, from Deloitte: “The consumer is more optimistic than in previous years, which will lead to a significant upswing in Christmas spending. However, the search for the best price and a useful gift will continue to be ingrained habits.”  

The most popular gifts

Once again, cash is a preferred gift of Spaniards, and for the first time in several years it has made its way into the ranking of the most commonly given gifts.   However, as in previous years, clothing, books, perfumes and cosmetics will be the most popular gifts given during this holiday season.

Useful gifts are also among the most popular, especially for children, and educational toys, books, and clothing and footwear rank first, second and third. In the case of teens, video games continue to lead the ranking, which remains broadly unchanged, except for smartphones, which have improved their position in the ranking by three spots.

Hypermarkets and large department stores, where most people shop

Not all Spaniards do their holiday shopping in the same types of places. Consumers either head to large department stores (which have noted a recovery in market share) or to specialized chains stores, while super- and hypermarkets rank third. However, when it comes to food, hypermarkets are where most people shop, followed by supermarkets and hard-discount stores.

Consumers want lower prices, more advice when they shop and a better integration between online and physical stores, and consider packaging, store decoration and childcare services to be less important factors.

The internet, the key to the whole process

The internet has become one of the main tools used for shopping. However, despite the growing digitalization of consumers every year, Spaniards still prefer to do their shopping at an actual store. Food and beverages (90%) and clothing (89%) are the main categories which bring consumers to the shops.

It's also worth noting that the loyalty concept is currently much more closely linked with physical stores than online ones, to the extent that if a consumer can't find a product in the place they usually buy it, 60% will try to find a way to buy it at the same chain (either going to another store or through its website) in the case of purchases at a physical store, and just 13% would do so in the case of an online store.

The availability of professional advice, the ease with which exchanges can be made and after-sales services accessed, enjoying the shopping experience and the safety of the payment methods are the main reasons Spanish consumers make in-store purchases. The aspects consumers value the most when making online purchases include access to the opinions of other consumers, the ability to compare prices and find deals, availability and home delivery.

Smartphones and tablets, increasingly important

The number of users who made purchases using a smartphone or tablet increased for the third consecutive year. Moreover, in the case of the former, Spain is well above the European average.

According to Privalia, Spanish households generally buy their gifts in advance and make purchases via their mobiles. As for which device is used more often, the broad majority usually use their mobile to connect to the internet. Online consumption this holiday season in Spain will increase by 10% compared with 2014.

The retail sector anticipates a favorable holiday campaign

The companies comprising the National Association of Large Distribution Companies (ANGED) will reinforce their workforces during the season with 18,000 people.

The trend towards a recovery in consumption and economic activity in recent months sets the stage for a favorable start to the holiday shopping season. In a context of job creation, price moderation and less tax pressure, household incomes are improving and, along with it, people's willingness to spend money this year.

Small businesses expect sales to expand by 6% during Christmas, according to data from the Spanish Confederation of Retailers (CEC). That increase would enable the sector to end the year in the black for the second year in a row, confirming the end of the crisis, which yielded seven consecutive years of losses.

Manuel García-Izquierdo, President of the CEC, said that last year was the first positive holiday campaign, in terms of sales, since the crisis began. This will lead to around 35,000 jobs, according to estimates from the organization, which expects a definitive recovery in consumer spending in 2016.

Is there a recovery in confidence?

According to the Cetelem Observatory, there is a general recovery in consumer spending this year, which shows not only that Spaniards have spent more, but also that there has been a change in purchasing behaviors, with a growing trend towards spending in large specialized stores, online, and on private label and secondhand products. In this new context, loans have reached new heights as an alternative for acquiring products and services.

When making a purchase, price is currently the quality consumers value the most (especially in the case of large department stores).

In this context, the forecast from consulting company IRI suggests that Spain will see an increase in sales in terms of value by 2.1% in 2015 and will remain steady in 2016, albeit to a smaller degree. In any event, the end of the crisis still seems to be a long ways away, as more than 90% of shoppers believe the economic situation is poor or mediocre and don't expect much of an improvement next year.

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01/08/2017