Bad Economy Closes Local Madrid Stores

There was an article in last Thursday’s 20 Minutes free newspaper. It
detailed the number of closings of local stores taking place due to the
flagging economy. Below is my translation of the article.

The Economic Crisis Threatens Madrid Neighborhood Stores: 2 Stores Close Daily, southern region shops sell 30% less. Electronic and food stores are closing fastest.

After
a lifetime of buying the daily bread in the corner store or chatting
with the local clerks, many neighbors are finding their lifelong stores
with their metal shutters closed and doors locked.

Every
day 2 neighborhood stores close because of the decrease in sales. About
400 local stores have closed in the last 6 months. “This is nothing
more than the tip of the iceberg, in 3 months the entire industry is
going to collapse if no solution is made. (i.e. an injection of money
by the
Comunidad)”.

The cause is the drop of
sales: Madrid stores now take in about 7.1% less than in April, when
the crisis was a true reality. In the periphery of the southern
districts and municipalities the situation is most dramatic: sales have
gone down by 30%, according to the store owners of the area.

Above
all, the home furnishings and electronics are suffering more than most,
selling 15.8% less, now that fewer and fewer new houses are being
built. Food stores sales have also fallen by 3.8% mainly due to the
rise in prices and the purchase of cheaper products.

This
commercial “situation” translates into 1,600 more persons out of work,
“most of all for immigrants and young people which are cheaply and
easily fired,” says the CC OO. “Even though these may be contracted
workers.”

The above loose translation of the article underscores my blog entry from December 2007 entitled “Neighborhood Spanish Establishments Closing“,
which details the closing of a couple of my favorite neighborhood
stores. Even the place downtown near the Plaza Mayor, a store where I
always bought my pancake syrup and a few other American products, has
recently closed.

“They say” things are about to get much much
worse in just the next 6 months. I can’t imagine what that’s going to
be like. It’s really hard to believe that “normal people” are paying
much attention to this so-called “Crisis”. Streets and stores are as
packed as ever with shoppers, everyone’s carrying shopping bags of
recent purchases, and the bars and restaurants are full every weekend.
Maybe these same people are just buying fewer things or maybe they’re
buying cheaper things. I really don’t know, but it seems people aren’t
very worried – YET.

 
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3 Responses to Bad Economy Closes Local Madrid Stores

  1. Tam says:

    The stores closing took me some getting used to also.

  2. MadridMan says:

    We tell ourselves, “Well, it’s probably cyclical and other stores will open soon which will replace the other long-time stores.” That may be true but it doesn’t help our sense of community and brotherhood.

  3. “In the periphery of the southern districts and municipalities the situation is most dramatic: sales have gone down by 30%, according to the store owners of the area.”
    I’m not surprised as that is where most the poor immigrants live and in an economic downturn they are the first to be hit.
    I personally believe that things are going to get a lot worse in 2009, the delivering process is only starting and unfortunately it’s going to be a long and painful process.
    For those that follow economic trends there’s an interesting and well written economics blog I came follow. Eurowatch. He recently posted that Spain is facing a more serious threat than inflation deflation.
    Inflation is dead in Spain
    If there is any good news, it’s that house prices are getting more affordable. The bad news is the days of easy mortgages are over. You need a minimum of 30% down plus 10% for fees. A serious chunk of money for anyone.
    I’ve been saying for a while that house prices will drop a minimum of 50% if not more. Even at that point house are still too expensive for the average wage earner in Madrid.
    BTW house prices are now down 65% in California and buyers are slowly coming back into the market.

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