Spreading Spending: Too Many Shops?

The calle Major in Alcudia runs from the Plaça Constitució to the Porta Mallorca (Sebastian) gate of the reconstructed city walls. The most notable building along this pedestrianised street is the town hall. Otherwise it is a street with buildings that are superbly preserved in line with protection requirements for the old centre. These are homes, a few bars and some shops - not big shops but small ones that typically sell clothes, accessories and craft-style jewellery.

A few years ago there was a shop close to the gate which was somewhat innovative in what it had for sale. It was the only shop along this part of the street. The owner was always a little concerned by his being the only shop. He felt isolated and a potential target for robbery, especially in the evenings. He no longer needs to have the same concern. There are other shops and his now sells what most of the others do. Innovation didn't bring long-term success.

I mention the street as it is an example of rejuvenation and of how local retailing can develop. The shops are very pleasant. They add to the outstanding atmosphere of Alcudia that has been created through a prolonged period of transformation. But they are also a potential indication of undifferentiated proliferation. How many shops are actually needed which sell - in broad terms - the same sort of thing?

The associations for small to medium-sized retailers, Afedeco and Pimeco, are regular occupants of the press column inches. They come as a pair, usually agreeing with each other. The agreement tends to always be negative. The latest is that despite increased tourist numbers the spending is down. This isn't a new theme. It has been echoed down the years. And if it's not summertime selling, then it is the winter. The associations point to factors such as the liberalisation of the sales period in explaining decreases in members' turnover.

Local and traditional retailers are the ones defended by these associations. Advancing the cause of local traders is very much a government policy. It is also of interest to town halls: Alcudia, for example, has recently conducted a survey of local shopping habits. Yet where is it leading? There was a recent report which revealed that the number of businesses in Mallorca - ones active this summer - was back to a level similar to that of pre-crisis. The growth in businesses was overwhelmingly of the small business variety. Shops accounted for a good deal of the growth.

There are more tourists than ever before, certainly more than in the years immediately prior to the economic crisis. But was the situation with the smaller retailer markedly different? I would suggest that it wasn't. Coming back to Alcudia, I well recall a letter from the late Graham Philips that appeared in the Bulletin. There was little that Graham didn't know about business in the town; he had been involved right from the beginnings of the sale of properties in the City of Lakes at the turn of the 1970s. The point he made in that letter had to do with the proliferation of units that could be used as shops, bars or some other business, such as an estate agency. There were simply too many of them, and when they were occupied the businesses generally struggled.

Afedeco and Pimeco point, as everyone else does, to the increased number of tourists staying in holiday rentals. Logic suggests that this type of tourism is a boost to local business. It is, but it can depend on what type of business. In Palma the federation of residents associations is even less reticent in getting its name into the press. When it comes to rentals, about which the federation has had a great deal to say, it points out that the "gentrification" of the city - brought about by rentals - has led to the loss of the traditional, local business. It is being replaced by souvenir shops, ice-cream parlours and franchises, and these franchises are also identified by traditional cafés for their being squeezed.

Rentals tourism does benefit the so-called complementary (non-hotel) sector. The greatest beneficiary is arguably the supermarket retail sector. The Spanish association of supermarkets issued a report the other day in which it stated that supermarket sales in Mallorca this summer have trebled. It also made the point that in certain tourist areas a third of all shops are supermarkets, be these the national or multinational retailers, the Spars or others. We haven't heard as yet from the large retailers' association, but one suspects that the likes of El Corte Inglés will offer a different perspective to that offered by Afedeco and Pimeco.

Local is good, local is to be encouraged, but when one hears of lower spending, might the number of businesses be a contributory factor? What spending there is can be spread very widely and perhaps too thinly.