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Spanish Market Insight: Cash Strapped Consumers Hesitant, Schools Keep Sales Steady

Spain keeps avoiding recession, boasting record employment numbers, and maintaining a growth forecast. This does not mean that Spaniards are keen to spend, particularly in sports kit.
By Rocio Enriquez

The Spanish economy keeps resisting the recession trend that dominates the rest of Europe, with high temperatures well into October prolonged activity in the tourism sector. More people have been employed for longer, with over 70% of the active population working, and this means more money being spent. There is, however, indications that this activity is slowing down rapidly. All eyes are on the last quarter of the year, especially with the impact of new conflicts in the geo-political scene, but current figures throw a hopeful 2.4% of growth for 2023, averting recession once again.

Economic indicators and consumers mentality do not always converge though. Ongoing inflation and high interest rates combined with two volatile conflicts close to Europe invite caution in spending. For the boardsports industry this is bad news; snowboarding or surfing kit does not top the list of priorities. “Only consumers who are exploring a new sport, like wing foiling, or need a specific replacement are buying”, says Borja Herrero who runs Kite Oliva shop in Valencia.

Standardised prices for all of Europe do not help a market in which salaries are much lower than in neighbouring countries. “The cost of a snowboarding boot is the same as one month’s rent”, says Guillermo Colomer from Playgop Distribution. He suggests that brands keep a range of price point products in their catalogues that can suit markets with less spending power. Tourism helped Summer and Autumn sales, balancing a slow winter and spring, but overall, 2023 sales will not see good results for water sports stores. Snow fall, will particularly during the early December bank holiday, seal the fate of snowboarding stores. The preceding winter had been a short one due to the warm climate, so retailers are praying to the snow gods again at this point. Their stock situation is healthier than in other boardsports and if they are open for business for the Purísima bank holiday from December 6th to 8th, when they make 25% of their season sales, then brands can expect FW24-25 pre-orders to roll in.

It is a different scenario for summer pre-orders. The overstock situation has flooded the online market with discounted product that steal customers from brick-and-mortar stores. Their stockrooms are filled with product that they don’t know if they are going to sell. Playgop reports a general decrease of 30-40% in SS24 pre-orders and doesn’t forecast a stock stabilisation until at least SS25. Kite Oliva shares that they are favouring drop-shipping business, so they don’t have to commit to more stock. Stores with a school appear to be the ones with a good enough cash-flow to survive in this environment. Schools are a steady business, which is good news for the sport. The popularity boost that boardsports experienced during the pandemic has secured many new fans and keeps luring newcomers, especially young people and children.

While there is an important shift in consumer’s purchasing behaviour towards online discounts, there is also a demand for expert advice, product testing and community building that only core stores can offer. It is important that brands acknowledge this and think of solutions that can support the business of core retailers whilst developing their own B2C business. “Without retailers and ambassadors on the beach, it is difficult to give legitimacy to the best advertising campaign”, says Borja. Guillermo agrees: “There are great professionals in Spain that offer experiences alongside the product, keeping the sport alive”. Discounts secure instant stock conversion, community secures the survival of the sport for seasons of business to come.