From COP To Primark

I'm trying to think of the year. Was it 1964 or 1965? When the Sainsbury in my by-then home town of Camberley ceased to be a sort of High Street deli with porcelain walls that were reminiscent of a public lavatory and became a supermarket. Its modernised upgrading was due entirely to the development of the new town centre. Sainsbury was the first proper supermarket. Tesco followed, as did Presto (for those of you who can remember Presto before it was Safeway-ed).

Supermarkets in Britain were an invention of the 1950s, largely thanks to Jack Cohen, a one-time tailor from the East End, reinventing his pre-war Tesco stores. They were representative of the new consumerist society in much the same way as mass tourism was. And in a similar way to tourism, they operated according to a mass production model adapted for the service sector. And when the mass became so great, urban planning allowed for their relocation to the out-of-town retail park, signalling crisis on the high street. No sooner had Brent Cross Shopping Centre opened than the road to Wembley was abandoned by shopping supporters switching their allegiance to the retail stadia of the North Circular Road.

The story of Mallorca's retail development is not dissimilar. It differs mainly in the development having occurred much later. Recent relaxations of planning regulations have facilitated a further increase in the number of commercial centres, predominantly out-of-town. Primark's arrival in Carrefour's new centre in 2016 will be one further example of this and an example also of an internationalisation of Mallorca's retail sector which had long given the impression of being antagonistic towards foreign investment.

The commercial centres have not all been greeted with open arms. When Media Markt, the German electrical goods giant, opened its Palma store, there was a campaign against it and in favour of small shops in towns out in the sticks. It was a campaign with more than just a slight hint of xenophobia, but it was, nonetheless, an understandable one. Communities, like those which existed along Britain's high streets, were and are threatened by a concentration of commercial centres in the greater Palma conurbation; this threat exacerbated by Mallorca's small size and so ease of transport.

But Mallorca's commercial centres are, again like Britain, an extension of how retail competition evolves and can leave smaller retailers trailing behind, struggling to adapt or out of business. When Sainsbury opened in the new town centre in Camberley, competitors along the high street which didn't adapt were affected. Mac Fisheries, Cullen found the going tough. And the story of competition from larger stores, i.e. supermarkets, in Mallorca is largely the story of one man - Francisco Lavao.

He wasn't from Mallorca originally but from Tetuán, a district in Madrid. He came to Mallorca at the age of ten in 1952. He was to go on to form a chain of supermarkets. Their name was COP. Lavao was the first true supermarket entrepreneur, and his story is a remarkable one. In 1977, the supermarkets having suffered in the wake of the oil crisis, he upped and left Mallorca. He fled to Argentina with a suitcase stuffed full with fourteen million pesetas. Three years later, he was extradited to Spain in order to stand trial on a charge of unlawful bankruptcy that had brought about the collapse of the COP stores. The most astonishing aspect of this story is that Lavao, who seemed genuinely remorseful, picked himself up and started all over again. His new supermarket venture took its name from the words "servicio" "y" "precio". SYP.

If Francisco Lavao was arguably the man who created Mallorca's supermarket sector, it was a businessman from Asturias whose company was to give Mallorca its best-known retailing name, that of the department store El Corte Inglés.

There is a connection between El Corte Inglés and Tesco insofar as the Madrid store was originally a tailor's shop, established in 1895. The Asturian Ramón Areces Rodríguez bought the shop in 1935. It was the start of the creation of a retail empire. Yet, despite the fact that El Corte Inglés is so well-known in Mallorca and that its reputation might suggest that it has been long-established here, the Avenidas' store isn't even twenty years old. It wasn't opened until 20 September, 1995. In the same year, the company bought fifteen commercial centres from Galerias Preciados, one of them having been the Jaume III store. It had taken eleven years for the building and then opening of the Avenidas' store to become a reality. The administrative process to permit it had started in 1984.

Such administrative processes don't now take as long. Permissions for commercial centres are generally easier to obtain. And Primark will be a beneficiary. The latest chapter in the story of the changing face of Mallorca's retailing.

Are You Being Served? Spanish retailing

Ten years ago I splashed out 1500 euros on a decent digital camera. Having parted with the cash, the camera soon developed a fault. It turned out to have been just one of those things. The replacement was perfectly ok and served me for several years until it was stolen.

There had been no difficulty in obtaining the replacement from the retailer. I explained that there was a fault. There were no questions, there was no examination of the camera, and no quibbling whatsoever. The sales assistant got a new boxed-up camera and handed it over.

The point of this story is that the camera was bought at and then replaced by the main El Corte Inglés department store in Palma. El Corte Inglés doesn't do cheap. But what it does do is quality and service.

Gripes about service in Mallorca are legitimate, but there are many examples which disprove a widely-held belief that service is universally lousy. El Corte Inglés is one, and it is an example from a sector - retail - that is often damned for its unreliable opening hours and apparent lack of interest in the customer.

A while ago I mentioned the fact that it was hard to think of really world-class Spanish businesses. A correspondent referred to a handful which had escaped my attention, one being the Zara fashion store chain. Being strictly accurate, Zara is just a brand; it is one part of a suite of stores that comprise a company called Inditex. And Inditex has something in common with El Corte Inglés; they both feature in the list of the world's top 50 retailers.

The consultants at Deloitte are a busy bunch. They churn out surveys left, right and centre. Coming hard on the heels of one of Spanish travel agents, Deloitte has issued, in collaboration with Stores media, its 2012 "Global Powers of Retailing" survey.

This ranks, in order of sales, the leading 250 retailers across the globe. Dominating the top 30 are US companies - Wal-Mart is way out on its own at number one, but the UK's Tesco is number three in the world - but just under these real powerhouse companies comes a trio of Spanish retailers. El Corte Inglés is at 47, Inditex is at 49, but beating them both, and therefore Spain's leading retailer, is Mercadona, which is ranked at 42. There is only one other Spanish company in the 250, and that is Eroski (98).

It's when the list is broken down according to style of store that Spanish performance becomes more significant. Mercadona can't really compete with fast-moving consumer goods giants like Wal-Mart and Tesco, but El Corte Inglés is the world's fifth largest diversified retailer (beating Marks and Spencer into sixth place) and Inditex is the fifth largest fashion goods retailer.

The growth of Inditex has been impressive, despite economic conditions. It hasn't relied on acquisition but on expansion into new geographic markets. So well has it been doing that it is likely to overtake two well-known US companies, Kohl's and J.C.Penney, and is not so far behind Macy's, the world's number one fashion retailer.

Zara and Inditex's growth is in keeping with the fact that the most profitable of the retail sectors is fashion, but Inditex's success could also be a cause of competition. The Chinese, now developing quality brands but at lower prices, have been moving in, the likes of Mulaya seeking to take on Zara. But as with El Corte Inglés, a reputation for quality is likely to maintain Zara's strong position. However, where Inditex can expand into foreign markets, so can others.

Of UK (Irish) stores that many an expat has expressed a desire to have in Mallorca, Argos and Primark are names that regularly crop up. Argos would find it difficult, and the fact that at number four in the world's list of so-called hardlines and leisure goods retailers is Amazon.com partly explains why it would. Primark would be a different matter. It has already been successful in moving into mainland Spain and as it is also in Gran Canaria, then why not Mallorca? And it's not just the expats who would be thankful for a Primark. There is a Facebook page called "Queremos un Primark en Palma!" ("queremos" being we want) that has over 4,000 likes.

Analysts have identified over 140 cities in 12 countries that could be ripe for a Primark store. If there were more in Spain, and at least one in Mallorca, then Inditex may just have to watch out.


Any comments to andrew@thealcudiaguide.com please.