Spanish Market Insight

Spain’s recovery is interrupted again for the third time. The global political climate has pushed inflation out of control. This is drying up consumer spending capacity. However, Spain still has a couple of cards up their sleeve. Combined with the new “one’s gotta live” mentality, sales in boardsports should not suffer too much. Inflation has skyrocketed to 9.8%, its highest since 1985. Salaries are not increasing at the same rate as prices. Saving and spending capacity are impacted. This new challenge arrives when Spain is still recovering from the pandemic’s GDP drop. Employment rates have increased significantly. People with a salary are generally keen on going out to spend after months of not being able to do so. Electricity prices account for over a third of the inflation rate. Spain is unique within the EU, though. Their main source of gas is Algeria, not Russia, and 40% of their energy comes from renewable sources. This has allowed the government to negotiate an “Iberian exception”. The cost of energy will no more be linked to the standard EU price. The electricity bill of Spaniards will get lower. Two years after the pandemic started, tourism has not reached half of its 2019 figures. However, the conflict in Ukraine could have a positive repercussion. Eastern Europe, Greece or Turkey are not appealing destinations in the current geopolitical situation. Spain could welcome tourists who are now looking for safer destinations. So, there are glimmers of hope on the horizon. Nevertheless, the government should see these projects through as quickly as possible. In the meantime, they are spending a lot of public money in help measures, while lowering taxes to smooth the daily grind. Public debt has increased to record levels, a debt that will have to be paid by future generations.

SPAIN The post-pandemic shift in mentality has fuelled sales in boardsports. Values have been revisited. “People PORTUGAL have realised that life is not just about having, but FRANCE about living”, says Serio Mur from La General Surfera, UK GERMANY in Barcelona. After the boom in skate and surf, ITALY everybody looked at snowboarding. Two seasons off SWISS the menu kept everybody wondering. The impact has been different. There are not many newcomers, but a lot of comeback kids. Snowboarders who hadn’t practised in years decided to get back to it. Their decade old gear seemed outdated, so they invested in new kit. Sales of boards, bindings and boots have been excellent. Sergio celebrates this with mixed feelings. He is out of stock, but he only got 30% of his orders delivered. He could have sold much more. Many retailers cancelled orders last winter when resorts closed. “Retailers did not forecast due to the uncertainty and the amount of stock they had from last season”, says Gonzalo Rubí from Happy Riding distribution. He secured much more stock than he had been ordered. It was a leap of faith that proved worthy. Careful planning has averted some problems, but the general situation is far from smooth. Factory backlogs and the prohibitive cost of transport are disrupting delivery times. Surf sales were impacted by wetsuits scarcity. Winter suits were only delivered recently. What’s the point of buying a new board if you don’t have a wetsuit to get in the water with? Bold initiatives like Happy Riding’s represent the synergy needed to move forward in these uncertain times. Specialised retailers remain the favourite purchasing channel of sports fans. They value the human behind the sale. Sergio’s website is a success, but not in the form of direct sales. “It is a spectacular window”, he says. “Many customers come to the store after checking the website to finalise the purchase in person”. The human touch seals many deals in the boardssports industry. Brands should remember this when they build their D2C sites. Offering a 20% off will secure short term profits but will endanger the soul of the sport in the long term.