Killing The Shops: Discretionary spend

I bumped into someone in Puerto Pollensa the other day who I have known ever since he opened his first shop some years ago. Back then, and we're talking probably eight years ago, he was full of enthusiasm. Mallorcan, he spoke perfect English in an often vivid fashion and was imbued with an American mentality of the can-do.

He expanded and opened further shops. It would be totally unfair to make these shops recognisable, but suffice it to say that they weren't (still aren't) the usual fare. They are different, in other words. An Americanisation of marketing had taken over and with it had come differentiation and other expressions from the marketing lexicon. It all seemed like it was progressive, innovative, new. And for a time, it all worked.

The person I met the other day was not the same one I had first come to know those years ago. He's keeping the Puerto Pollensa shop going for the season, but at the end of the season is likely to close it.

It is of course only early into the season, too soon perhaps to make a judgement, but he was saying that the evenings, in terms of passing trade, were like those he had once known in March. He asked me what I thought. I shook my head, not because I was unable to supply an explanation but because I have all but given up bothering to offer one.

A strengthening pound, and Puerto Pollensa is very British, and you would think there would be more action. There again, word coming from some sources suggest that all the forecasts as to volume of British tourism that were emanating from the trade fairs during the winter are proving to have been wide of the mark. There is also a good deal of concern being voiced by local tourism sources as to the "chauvinistic" campaign by David Cameron to impress upon the Brits the value of the staycation.

There are always reasons one can latch onto. One that doesn't obtain in Puerto Pollensa to anything like the extent that it does in other resorts is that of the all-inclusive. It has grown in the resort but remains only a small contributor to the overall market.

The main reason, and despite a strengthening pound, is that shops have born the brunt of the economic downturn, more so than bars and restaurants. The only shops which have remained on an even keel or even flourished have been the chemists, the tobacconists and the supermarkets, the latter thanks to a growth in eat-in by tourists.

Tourism spend has always been discretionary. During the boom times, this spend found its way into shop tills for products that were rarely or if at all essential. It is the rise in consumer discretion that has been as significant a factor as all-inclusives and downturn in determining the impact on resorts' shops, and this rise pre-dates economic crisis.

This rise in spending discretion also draws into question the viability of revised opening hours, such as in Palma, and especially where larger stores are concerned. The tourism market, when it does spend in shops, tends to look for the more unusual or the local. Larger stores tend to deal in the familiar and in the domestic market; the benefits they are likely to make from tourism, when set against higher operational costs, are debatable.

But even the spend on the unusual or the different has been affected. The shops of the chap I bumped into in the street trade in the different. As such, they conform with a call for the wider tourism trade to innovate, yet they have not proven to be sustainable. And it is discretionary spend, more than anything, which is killing them.

The starkest change to this shopowner is in the way his enthusiasm has ebbed away. He admitted that he has lost his motivation, that he has become sick of it all. Not because he has lost enthusiasm or motivation for what he sells, but because of the way in which the market has changed over the past few years and which has sapped him of the motivation. He is not alone, and to the economic factors you can add, in Puerto Pollensa, the arrival of an evening market. It might benefit other businesses, but it does nothing for the shops. They have been strangled by economic factors, and there is little life left and likely to be little life in the future.


Any comments to andrew@thealcudiaguide.com please.