The role played by retail in Spain’s economy
The retail sector plays a very important role in an eminently service-based economy such as Spain’s, with a larger share compared to other European economies in terms of activity, jobs and number of firms. It is an atomised sector with a considerable number of SMEs and micro-SMEs and is particularly labour-intensive. Moreover, its presence is widespread throughout the length and breadth of our country. All this gives it a certain cohesive role, both from a social and territorial point of view, within the Spanish economy.
Retail accounts for 4.2% of GVA,1 making it an extremely important sector for the Spanish economy and one that has been growing strongly in recent years (+3.2% per year on average between 2014 and 2018). Moreover, its importance is slightly greater than in other European economies with a similar economic structure (3.9% in Germany and France and 3.5% in Italy) and also compared to the EU average (3.9%).
- 1. Latest figure available from 2018.
This is a particularly labour-intensive sector: in Spain it employed 1.7 million people in 2018; i.e. 9% of the total number of employees, more than double its contribution to GVA. Once again, the proportion of people employed in retail out of the total number of employees in the country is higher than that of the region’s major economies (between 8.7% and 8.1% in the case of Germany, France and Italy) and is also above the EU average (8.4%). It is also a sector that generates opportunities for female entrepreneurship: more than 50% of the firms incorporated in the sector are led by women.
However, its job opportunities have gradually decreased in recent years, due to the progressive penetration of e-commerce and the lasting effects of the recession; since 2008, retail has accounted for 5% of the jobs lost in Spain, twice as many as the economy as a whole over the same period.
Spain’s retail trade is an atomised sector. It was made up of almost 436,000 firms at the end of 2020, around 13% of the Spanish business fabric. Each company in the sector has 1.3 establishments on average, representing just over 550,300 establishments. These figures have been falling steadily in recent years: since 2010, the number of retail firms has fallen cumulatively by 14% and the number of establishments by 11%. This suggests that the financial crisis of 2008 caused more business concentration in the sector than the closure or disappearance of physical premises.
In this respect, the sector’s size in terms of companies is moving towards the European average (around 14% of Europe’s business fabric) and the most similar countries to Spain (13% in Germany, 15% in France and 16% in Italy). The annual data available for 2020 do not show any particular destruction of Spain’s retail business. despite the impact of the health crisis due to COVID-19. There is no doubt that the aid put in place to alleviate the impact of the mobility restrictions (in the form of guaranteed lines of credit, rebates on tax and the rental of premises, as well as furlough measures) have helped to minimise the drain on a sector hit hard by the restrictions (especially the subsectors of textiles and fashion and hospitality).
It should be noted that Spanish retail is dominated by food, beverage and tobacco establishments (21% of the total companies in the sector), followed by household goods stores (15%, including clothing, furniture and electrical goods, among others) and finally by non-specialist establishments (12%).
It was made up of almost 436,000 firms at the end of 2020, around 13% of the Spanish business fabric
In terms of the number of employees, the retail sector’s business fabric is essentially made up of companies without salaried workers and micro-SMEs. According to the annual Company Structure Statistics produced by Spain’s National Statistics Institute, half the firms in the sector do not employ salaried staff; while 48% of the total have a workforce of between 1 and 10 people on their payroll. However, it should be noted that, in terms of turnover, the large companies in the sector (250 employees or more) account for the biggest share of turnover in the retail sector as a whole (35% of the total). In recent years, with the number of companies progressively falling, the largest drops have been concentrated among companies with fewer than 20 workers, while the number of firms with more than 1,000 workers has increased by 10% since 2008.
while Madrid accounts for most of the sector’s national turnover (26%) and Catalonia has the largest number of employees (18% of the total).
The retail sector is very much present throughout Spain. A regional comparison shows that three autonomous regions stand out from the rest: Andalusia, Catalonia and Madrid. Andalusia is the region with the largest number of establishments (18% of the total), while Madrid accounts for most of the sector’s national turnover (26%) and Catalonia has the largest number of employees (18% of the total).
However, the situation changes significantly if we take into account the sector’s relevance in each region, measured by the share of retail firms in each area’s business fabric. It can be seen that the presence of retail trade across regions is relatively homogeneous, so it could be said that it is widespread throughout the country. In this case, the sector is relatively more important in Extremadura (18% of its business fabric), Andalusia (17%) and Castilla-La Mancha (16%), as well as Ceuta and Melilla (over 25%). On the other hand, Madrid (9.6% of the region’s business fabric), the Balearic Islands (11%) and Catalonia (11.3%) would be the regions where retail is less relevant as a business.