One of the worst Christmas sales periods that I can remember, remarked a shopkeeper on one of Palma's normally busy shopping streets. Christmas Eve and most of the street was empty. Not a shopper in sight. During the run-up to the busy Christmas period I had been rather surprised at how quiet Palma was, despite the fantastic festive lights. And all this with the Spanish government telling us how the economy was surging ahead. The shopkeeper told me that obviously there was now more competition especially with the new out-of-town shopping centres. But she also claimed that people were also watching their pennies. Everything has gone up in price but wages remain the same, she said.
And of course she is not wrong. Central Palma is now one of the most sought after places in the world with prices almost to match. The cost of living since the end of the recession has risen quite sharply but wages remain at almost recession levels. Also, the deep financial crisis taught Spaniards a vital lesson ... it is better to have money in the bank than to spend on credit. So according to the Spanish government the economic situation may be quite rosy but in some parts of Palma businesses tell a different story. Times are still hard especially for retailers. There is so much competition that it may be fantastic for bargain hunters but the smaller traders are finding it hard to survive. The festive period is key for shops and so far it is below expectations.