Spain consumer

 

See also:  our page about Spain

 

 

Spain consumer Income Which Regions to target? Madrid Barcelona Valencia Housing trends / permanent tourists Apartment dwellers Male vs Female spending power Increasing purchasing power of women University educated population employees vs. entrepreneurs Curious life style facts Unemployment statistics… Price statistics Big (but declining) smoking population Health trends Sports University education Eating Habits Eating out Drinking Alcoholic Drinks Attitude toward “do it yourself” Food shopping Beauty / Fashion trends Media Going out trends Theatre goers Culture Tourists

 

 

The number of households in Spain stood at just over 15 million in 2005, up by 30% from

1990, driven by the growing number of divorces, the rise in the number of single-person

residencies, greater life expectancy and increasing immigration. Most households comprise

two people (4.6 million households, up 5% between 2004 and 2005 alone). This is mainly

due to the increase in married or co-habiting couples taking longer to have children and

also the longer life expectancy of couples whose children have moved out.

 

Another area of interest is the single-person household, which has increased 386% since

1990 to encompass 17% of the population in 2005. This is due to the increased wealth of

Spain, which has allowed younger people to be more independent from their parents,

purchase or rent their own property and in many cases move to different areas of the

country.

 

 

 

 

Income

The mean annual gross income saw large gains to reach €16,168 in 2005 an overall

increase of 69% since 1990. However, in constant income terms this looks underwhelming

as the 2005 figure is less than in 1990. The country's strong economic performance, with

annual growth above the EU average, a marked increase in available jobs and the rise in

the average wage were the three main factors behind this growth in earnings. However the

increase in prices, introduction of the Euro and high cost of housing have all had an effect

on the real spending power of the increase, with a 1% decrease in constant gross income

and a 4% fall in constant disposable income from 1990 to 2005. However this is predicted

to be more or less stable moving into 2015.

 

In 2005 those of tertiary education, which includes further education and university, had by

far the largest disposable income, at €16,805, up 42% since 1990 and 9% in the last five

years alone. It is little surprise that the higher the education level the higher the pay, as

higher paid jobs require a better education. An increasing number of people are moving on

to higher education, at just under 4 million educated to this level in 1990 but more than 6 million in 2005. In 1990, 9% of the

population had attained a university education compared with 15% in 2005.

 

Over the 1990-2005 period, mean disposable income increased by 33% to €30,045,

reflecting the positive economic development, strong job creation and the rise in average

wages. Yet this growth can also be explained by the expansion of income sources in the

great majority of households, with women making a significant entry onto the labour

market and to a lesser extent, young people delaying moving out.

 

Despite this rise in disposable household income, according to a survey carried out in 2003

by the Spanish Confederation of Housewives, Consumers and Users Organisations

(CEACCU), 59% of Spanish households have financial difficulties reaching the end of the

month – 38% sometimes have economic problems reaching the end of the month, 11%

frequently have this problem and the remaining 10% nearly always have this problem. This

is directly linked to the 71% of consumers allocating a considerable percentage of their

wages towards mortgage payments.

 

By region, Madrid has the largest disposable income with $25,493 in 2004, then Catalunya

with an annual household disposable income of $24,763, and Navarra, with $24,695.

 

Extremadura ($16,470) and Andalucía ($18,336) are the communities with the lowest

mean annual disposable incomes.

 

The most significant percentage changes from 1990 to 2005 were in the higher income

brackets of over $55,000, with the single largest percentage gain in those that earn in

excess of $75,000. This is due mainly to the increased importance of higher-paid tertiary

work undertaken by university graduates in Spain, who are being paid similar levels to

their international counterparts in order that Spain retains the talent, both young and old.

Obviously, the emergence of professional women has also boosted this figure

 

Overall consumer expenditure rose 152% from 1990 to reach €493 billion in 2005. This is a

direct result of growth in the economy, job creation, and greater wealth through

house-price inflation and incorporation of women into the labour market, all of which has encouraged consumption over the 15 years and will continue to do so into 2015.

 

The proportion spent on food and non-alcoholic beverages dropped by 4 percentage points

from 1990 to represent 16% of expenditure in 2005. This was due to reduced price

inflation on grocery and food items (with the exception of packaged food) and the growth

in eating out, which has taken some of the expenditure to other areas. In the same period,

clothing and footwear expenditure slipped 2 percentage points to make up 6% of total

expenditure. This would indicate that manufacturing procedures and the reducing real cost

of basic clothing and footwear items has resulted in the ability to spend less in percentage

terms in this sector. There has been a rise in expenditure on hotels and catering of 2

percentage points to reach 19% of all spending in 2005. This eating-out trend is on the

increase in Spain, and there has also been a significant rise in short and weekend breaks

taken by Spaniards. This has been driven by greater income, better transport links and an

emergence of more middle-income households.

 

Note: very important to note that as Spaniards got richer, the growth in spending on alchohol and tobacco increased faster than any other category!!

 

 

 

 

 

Which Regions to target?

 

In 2005 the Madrid (743 inhabitants per square kilometre) had the highest population

density, followed by the Barcelona region (676), then Vizcaya (512) and Guipuzcoa (347).

 

Urban population

Following large internal migration in the 1960s and '70s, Spain is a country with a mostly

urban population. In 2005, 77% of the population lived in urban areas, moderately up on

1990 (75%). The trend of movement from rural to urban communities is set to continue at

a slowish rate with 78% predicted to be living in urban areas in 2015.

 

Consumers in urban areas tend to have a higher income and are more driven to make

high-tech or modern purchases, more inclined to use the Internet and broadband and to

take weekend and city breaks and foreign holidays

 

Madrid

 

Madrid is the capital of Spain and hence its most important city. In 2005, Madrid had a

population of 3.2 million, nearly 10% up on 2000. As the financial and economic centre of

the country

 

Barcelona

Barcelona is Spain's second largest city, with a population of 1.6 million in 2005, up from

1.5 million in 2000. More cosmopolitan and modern than Madrid, Barcelona has

consolidated its position among the great European cities after the 1992 Olympic Games.

 

In general, there is more interest in fashion and design, which is reflected in the city's

shops, bars and restaurants, thereby attracting a wider range of people.

 

Valencia

Valencia ranks third with 803,000 inhabitants in 2005, up by 64,000 since 2000. The city is

gaining importance as an economic, financial and cultural centre, while it still has a healthy

quota of tourists.

 

Housing trends / permanent tourists

 

Both Europeans and non-European immigrants have acquired second homes in Spain. The number of Europeans – mostly British and German – that move to Spain to live out

their retirement has also increased year-on-year. The World Trade Organisation (WTO)

estimates that 800,000 to 1.7 million more European families will have second homes in

Spain in five years

 

This situation and the high price of housing pose great difficulties to young Spaniards in

their efforts to become independent. According to Spain's Youth Council, young Spaniards

devote an average of 57% of their income on the purchase of a flat.  

(how much money left for purchases of liquors??)

 

Apartment dwellers

 

By far the largest property type in Spain is the apartment, which is not surprising

considering the population concentration in cities. In 2005 there were 9 million apartments

in the housing stock, up from 7.5 million in 1990 and representing 60% of all dwellings

 

 

 

 

Male vs Female spending power

 

In 2005 men had an average disposable income of €13,238, which was 52% higher than

the €8,682 earned by women. However this disparity has narrowed since 1990, when the

annual income for men was more than twice that of women.

 

However, according to the National Statistics Institute, the number of households with

women with the highest incomes doubled in the 10 years to 2005, to represent 10% of

total households. Although the growing disposable income is the main cause of this rise, it

has also been strengthened by the higher number of single-parent families, due to the

small rise in the number of divorces

 

 

Increasing purchasing power of women

 

In addition the social make-up of Spain is changing rapidly with working women and career

women featuring much more. Approximately 30% of these households are comprised of

couples where the woman earns more than the man

 

 

University educated population

 

About 70% of Spain's student population attends public schools or universities.

 

The growing popularity of university has led to a rise in the number of households headed

by a person with higher education, which in 2005 stood at 17% of total households.

However young people do tend to stay at home even after finishing their university studies,

due to the high cost of housing and the precarious work situation

 

 

employees vs. entrepreneurs

 

In 2005 most heads of households were employees, a proportion that was up only very

slightly on the previous year (39.3% of households compared with 38.9% in 2004). The

trend seen over the 1990-2005 period (11% of heads of households unemployed in 1990,

but 3% in 2005) reveals that more employment is being created in the employee sphere.

 

In addition the overall percentage of households headed by an employer or self-employed

worker has fallen as Spain increases in wealth and creates more employment opportunities.

 

This trend also backs up evidence that shows a gradual migration from rural communities,

where self-employment is high, to cities, which are characterised by employment

opportunities through working for others.

 

 

Curious life style facts

 

Birds were the favourite pets in Spain in 2005 and indeed Spain has the eighth highest pet

bird population in the world with 7.7 million pet birds. (could we use this in advertising?)

 

 

Unemployment statistics…

Spain's overall unemployment rate (14% in 2005) is more than double the European average (around

5%). Nonetheless, young Spaniards, both men and women, find it hardest to gain employment.

They take an average of 29 months to find employment after finishing their studies, with

their first jobs often being temporary and contract work. 

 

(what are the statistics in 2008???....we need to find recent statistics…and compare to population. Need to subtract the unemployed…not out target market)

 

 

Price statistics

 

Food and non-alcoholic drinks prices rose significantly above the rest of the items in 2004,

driven by increases in demand and exchange rates pushing up the costs, and this sector

continued to rise in 2005, albeit at a slower pace.

 

Note: this should be an opportunity for imports!! More expensive local producers due to currency appreciation.

Transport prices have seen increases over the 2003-2005 period by 5 percentage points.

 

This is mainly due to increasing oil costs driving up the cost of fuel and the seemingly

inexhaustible consumer demand for oil. In addition, the strengthening of the euro pushed

up the net import rate for this product.

 

 

Big (but declining) smoking population

 

In 2005 almost 30% of Spaniards aged 15 and over smoked; 41% of men and 18% of

women. This percentage has fallen significantly, from 36% in 1990, due to education, and

a concerted effort on the part of the existing and previous governments, with a large

decrease of 5% of the population between 2004 and 2005 alone.   The increasing preoccupation with

health among Spaniards and the proliferation of government initiatives has reduced the

number of smokers. The rises in the prices of cigarettes (due to the necessary price

convergence with the rest of EU countries) has also had an effect, as have private

initiatives, with an increasing number of companies launching schemes to help employees

quit smoking. All these factors have increased pressure over tobacco, causing an increasing

number of Spaniards to want to give up smoking and driving up sales of both smoking

cessation aids.

 

Note: with the emphasis on health…maybe “fruit –based caipirinhas would be a success?”

 

 

Health trends

 

Alternative medicines are rapidly gaining popularity among Spaniards, boosted by the

rising trend for natural products. There has been a the noticeable increase in the number of

herbalist shops and in traditional pharmacies offering natural products at a time when

interest in homeopathy and other techniques is growing

 

Gym membership is rising year-on-year, in line with a society increasingly concerned about

aesthetic factors and body care. In 2003 it was estimated that about four million people

subscribed to health centres in Spain, usually visiting after work during weekdays,

especially Monday to Thursday. Aware of the fact that people are interested in more than

just muscle development, centres have popularised techniques that combine the care of

body and mind, such as yoga, tai-chi and hydrotherapy.

 

 

Sports

 

Sport is not one of the main activities of Spaniards in their free time, although physical

appearance and the general drive for health is contributing to reversing the trend slightly.

 

According to the National Health Survey, in 2003 more than half of Spaniards did not

exercise regularly. Young women stand out the most, with 62% claiming not to practice

any sport at all, or only occasionally. This is backed up by 2004 WHO figures which showed

that 55% of Spanish women were overweight compared to a European average of 42%.

 

However, the number of people interested in sport is much higher. Spaniards are

passionate about watching and reading about sport, as demonstrated by the fact that the

best-selling newspaper in Spain is Marca, which is exclusively dedicated to sport,

particularly football.

 

After football, Swimming and biking are the other two most popular sports in Spain. Moreover, major

concerns among Spaniards regarding health and beauty has led to a rise in the number of

gyms and gym membership. Increasingly hectic lifestyles have raised the popularity of

sports favouring contact with nature. Thus, adventure sports, such as trekking, rafting,

bungee jumping and climbing are gaining enormous popularity, especially among people

aged 16 to 30. In addition, increased wealth has allowed Spaniards to join gyms and spend

more money on equipment, allowing the proliferation of more expensive sporting

endeavours.

 

The emergence of Fernando Alonso has led to Formula 1 racing increasing in popularity. F1

motor-racing was only followed by a minority in the past, but now Alonso's races are

watched on TV by millions of Spaniards, who are increasingly showing more interest in

getting to know the peculiarities of this sport.

 

Marketing idea: tie our product to a hero in one of these “alternative sports”, such as F1 racing…

 

 

University education

 

The number of students in higher education, including university, was 1.9 million in 2004, a

rise of 59% since 1990. However this rise was most impressive from 1990 to 2000, rising

63% over these 10 years, but has been more or less stable ever since. This is due to

several factors, with overcrowding being a big problem in Spanish universities

In Spain there are 48 public universities, which take over 85% of students and 20 private

universities taking the rest.

 

In recent years, Spain has consolidated its position as the third most popular destination

for foreign students within the EU.

 

 

Eating Habits

 

The Mediterranean diet of Spaniards has held the country in good stead over the years,

with a lower level of heart disease. The WHO considers Spaniards to have one of the best

diets in the world.

 

There is a clear trend towards an increased consumption of packaged and processed foods

and a key change in eating habits over the 2000-2005 period

 

Overall, the Spanish purchased on average 10kg per person more fresh produce in 2005

than 2000. The two biggest gains in percentage terms over this period were other meats

and lemons and limes, whilst the biggest gains in real kg terms were pork and oranges,

tangerines and mandarins.

 

 

Eating out

 

Almost a fifth of the average household income in Spain is now spent on hotels and

catering; the increase on previous years has been driven by increased income and less

time to prepare fresh food due to professional pressures

This sector has seen a remarkable number of new ethnic restaurants,

especially in the main city centres and tourist areas. (Brazilian??)

 

 

Drinking

 

The number and type of drinking establishments in Spain is very broad, including bars,

pubs, cocktail bars, discos and live music bars. The sector is undergoing modernisation,

tending towards much more modern establishments with much more elaborate decor.

 

There are still a number of traditional bars, much cheaper and where most patrons are

men, although these are in a clear decadence. It is important to remember that Spain is

the second most popular tourist destination in the world and its bars and clubs rise to meet

this challenge.

 

According to the INE in 2004, the Spanish spent 3% of their total expenditure on alcoholic

drinks, with approximately 76% of men and 51% of women aged 15 to 64 years

consuming alcohol regularly.

 

Alcohol consumption patterns have varied considerably during the last two decades. The

traditional daily alcohol consumption – during meals or gatherings – is becoming less

common in favour of drinking much more centred on parties, holidays and weekends,

especially among young people. Older generations in contrast, continue with the traditional

drinking patterns, being common to consume alcohol throughout the day in small

quantities.

 

The change in drinking habits directly affects the types of drinks consumed. Beer and wine

are drunk Monday to Thursday, with spirits consumption increasing greatly at weekends.

According to the Health Department, 24% of young people drink alcohol on Fridays, rising

to 56% on Saturdays. Such consumption, essentially spirits, takes place in bars, discos and

pubs and, to a lesser degree, in private houses, streets and parks.

 

In the age group 13 to 19 there has, over recent years, been a marked change in

behaviour, with one of the most high profile activities being a phenomenon popularly

known as botellón. This involves teenagers congregating on certain streets or car parks and

drinking cheap supermarket beer. This activity is considered by many Spaniards to be

antisocial, noisy and a menace, with police trying to stop the practice. This has occurred

due to rising prices, independence of teenagers and the lack of control over the sale of

alcohol to minors. (DON’T TARGET THIS GROUP!!!)

 

As yet the Spanish have managed to avoid the Northern European experience of no-go city

centres on a Saturday night, alcohol and fighting etc going hand in hand. This is partly

cultural and also due to the late opening hours that allow drinking to be spread across a

longer time frame. However this may also have been controlled in the past through income

levels, making it more difficult for the young to afford alcohol. This again is changing as

Spain gets wealthier.

 

 

Alcoholic Drinks

 

Generally, alcohol consumption in Spain is tending towards products with a greater

added-value, with quality gradually being preferred to quantity. This is causing an increase

in the average price and the better development of premium categories, such as imported

beers, quality wines (DO, or denomination of origin wines), premium whisky or reserve

brandy.

 

In Spain, spirits are usually consumed in the late evening and mixed with soft drinks.

Branding is of great importance in spirits and in most cases consumers do not order drinks

by kind, but by brand name. In this context, expenditure on advertising acquires higher

importance. In addition the drinks companies are marketing

alcoholic beverages directly to younger consumers rather than traditional brands, with

bright fashionable labelling and pre-mixed drinks.

 

 

Attitude toward “do it yourself”

 

Unlike the US, Spaniards generally consider DIY a duty or even a punishment rather than a hobby. Most

consumers have little knowledge of DIY, and only perform simple tasks out of need,

The country's good climate also plays a key role; Spaniards have an outdoor lifestyle,

spending less time at home than their Northern European counterparts, and

consequentially devoting less time on home maintenance

 

markeing idea: maybe this aversion to DIY will lead Spaniard to NOT want to mix their own caipirinhas…so it is important to really team up with bars and restaurants that will mix the drinks for them

 

 

Food shopping

 

Spaniards go shopping once a week on average, although, contrary to other

countries, Spaniards prefer supermarkets because of their close proximity and increasing

product range. Supermarkets are the main distribution channel in Spain, followed by

hypermarkets. Both represent the bulk of food sales

 

Carrefour, with its wide network of supermarkets (under the Champion fascia), discounters

(Dia) and hypermarkets (Carrefour), is the leading multiple grocer in Spain. The French

company has a strong share in hypermarkets with more than 120 outlets in Spain

 

Nevertheless, Mercadona, a leading supermarket, has recorded the best performance in

recent years. This was supported by a strong policy of expansion and above all, its

marketing strategy of highly competitive prices and a wide range of private-label products

of high quality and at very economical prices. In 2005, Mercadona had more than 770

outlets of varying size in Spain

 

 

Loyalty cards are widespread in Spain, though Spanish consumers often show little loyalty

towards a chain or brand. Consumers visit five or six retail chains on average per month,

including supermarkets, hypermarkets, discounters, traditional and convenience stores.

Comfort, quality, price, offers and promotions are the key decisive factors when

purchasing.

 

In view of this, leading retail chains are intensifying their loyalty policies with constant

promotions and discount coupons. The accumulation of points per purchase, which can be

exchanged for gifts or large discounts, primarily on houseware products, is becoming more

and more important among the leading operators such as Carrefour and Caprabo

 

(could we market a loyalty-card program for cachaca??)

 

 

Beauty / Fashion trends

 

Due to the increased wealth of Spain, there has been an increase in premium brands and

the brand consciousness of the Spaniards as a whole, with premium fragrances registering

value growth of 29% from 2000 to 2005.

 

Although generally informal in dress and not particularly vain, Spaniards are becoming

rapidly and increasingly interested in fashion, a trend boosted by the growing importance

of image in society, greater sophistication among consumers and the positive economic

background – which has increased available income and purchasing power

 

The emergence of domestic brand retailers has also been fundamental in bringing about a

heightened interest in fashion. Chains such as Zara, and Mango have expanded throughout

the country, offering designer products at very competitive prices. Such expansion has

enabled lower- and middle-income earners to have access to avant-garde and modern

products allowing fashion to move away from being a luxury item to something most

people can enjoy.

 

In general, Spanish consumers favour brand names, preferring the name of a given

manufacturer to factors such as colour or form when they go shopping. In addition imports,

especially from Asia, swamping the market with products in the lower price range, has motivated leading manufacturers to focus on strengthening the brand name as a key

differentiation strategy. The greatest stumbling block is the development of one-brand

retailers, which offer designer products at much lower prices. These are especially popular

with younger generations.

 

 

Media

At home, Spaniards prefer, in order of importance, watching TV, listening to music,

listening to the radio, and reading newspapers and magazines. Nevertheless, during most

recent years, Spaniards are showing a growing interest in using computers – especially the

Internet – and playing with games consoles. Spaniards spend more than three hours a day

watching TV and, generally, watch it alone (44%) or with their partner (26%). The arrival of the Internet in everyday life has

also brought a change in domestic habits, since surfing the Internet is now one of the

favourite activities of Spaniards – especially among the youngest – in their free time.

 

Television is by far the leading communication medium in Spain, with a coverage of more

than 91% of the population. In 2003, Spaniards watched, on average, 214 minutes a day,

with TV reaching all income and age brackets. Late evening/night represents the prime

viewing time, with sports, quizzes and fiction being the most popular programmes in 2005.

 

Radio is the second most important communication medium in Spain, with an average

estimated coverage of 60% of the population. In contrast to TV, mornings represent the

prime time. Sports programmes, broadcast daily and live match broadcasts at weekends

enjoy enormous popularity.

 

Spaniards read less newspapers than many European countries as it is estimated that only

one in every 10 Spaniards buys a newspaper daily, although this figure doubles at

weekends when the major players publish economic supplements and special reports. The

sports newspaper Marca is the most read, with a daily circulation of 2.5 million.

 

more than a quarter of Spaniards consider watching TV their favourite hobby

 

In 2005, there were five national stations in Spain: two public (TVE1 and TVE2) and three

private (Antena 3, Telecinco and Canal+). The three private stations are quoted on the

stock exchange. Additionally, there are 12 autonomous stations, which can only be

watched in their respective autonomous communities, although quality varies dramatically

 

 

Does this list influence our choice for advertising?

 

 

 

Going out trends

 

Spaniards spend their free time mainly in activities of a social nature, such as enjoying

time with family or friends. Bars and restaurants in Spain are meeting points for friends

and real social centres. However, it is not until late evening or at weekends that Spaniards

have some free time to gather for a drink, mostly because of the split working day common

in Spain. Hence, for most Spanish, the week is divided in two parts: from Monday to Friday

is mostly dedicated to work, and weekends, to leisure

 

Spaniards increasingly carry out most of their socialising in the late evening/night, and at 

the weekend, with the latter especially true of people aged 16 to 25; four out of 10 young

people go out every night, or almost every night, at the weekend. People aged 20 to 24

generally return home the latest on weekend nights. Social gatherings are also the

favourite leisure activity among young people, with nine out of 10 individuals spending

some time with friends. Fifty-seven per cent of young people like going disco dancing and

53% usually meet friends for drinks

 

After the age of 25, most Spaniards stop going out regularly at night during weekends –

45% of people aged 25 to 29 go out little or not at all at weekends

 

 

Theatre goers

On the other hand, the number of Spaniards (women especially) going to the theatre has

increased since 2002. Dramatic plays attracted almost 50% of theatregoers, followed by

musicals with 20% of the total in 2003. Citizens of the major two cities – Madrid and

 

Barcelona – are the fondest of both cinema and theatre, due in part to the fact that the

offer is much broader in those cities. Again this is a reflection of more people being able to

afford the theatre

 

 

Culture

More than half of Spaniards never visit museums or art galleries, and only one in 100 pays

a visit to one frequently.

 

Lesson for Marketing cachaca: don’t make the marketing too “high culture”, because Spaniards are not interested.

 

 

Tourists

Spain remains the number two destination in the world

 

Spain continues to occupy the second position in the world for both the number of tourists

received (after France) and by volume of sales (after the US). The travel and tourism

sector now makes up 12% of GDP and is of an enormous importance to the Spanish

Economy

 

Key arrivals: German visitors return and the UK/France market still strong

 

The number of German visitors to Spain increased significantly for the first time in five

years and only the second increase in six years, taking the visitor number back to 2001

levels. This is due to a slight increase in confidence in the German economy coupled with a

sustained effort by Spain to bring back German tourists. This was coupled with continuing

growth of visitors from the UK and France

 

Note: germany = largest consumer of cahcaca worldwide (after Brazil)