Business associations say that international brands and large franchises are taking advantage of significant reductions in rents in Palma. The associations have observed that some investors have been moving in because small businesses have had to close.
Eugenia Cusí, the president of the Pimem restaurants association, says that for those with the money, there are opportunities. The large chains are seeking good-sized units on the frontline by the sea, while the reductions in rents are in some instances by up to 50% per month. For the existing small businesses, even these cuts don't compensate for 70% falls in restaurant sector sales.
So tough are things that there are bars and restaurants which can't afford to put heating on their terraces. "There are many businesses which don't have the liquidity to spend between 2,000 and 10,000 euros for warming their terraces in winter."
Toni Fuster, president of the Afedeco small retailers association, explains that "people with cash and the vulture funds have always done this". "There are people with the financial clout who are accessing places in the centre of Palma that a year ago wouldn't have been viable." He echoes Cusí's view that there have been rent reductions of some 50% but that these haven't been sufficient for businesses which have had to close.
There has been a 75% drop in turnover, and Fuster points to the main business costs being salaries and rents, plus the taxes. "Our concern is to recover employees from ERTE and revitalise the shops. But if there is no consumer activity ... . The new measures don't help, although the first thing is to solve the health situation."
In the neighbourhoods of Palma, Fuster recognises that there is a difference to the city centre. "Customers are more loyal. In the centre, there are no customers without tourism." "There are shops which are taking 50 euros a day," adds the vice-president of the Pimeco small to medium-sized businesses federation, Miquel Àngel Salvà.
As to aid to be made available through the town hall's PalmaActiva agency, Fuster explains that a total of 1.7 million euros means up to 2,000 euros per business. "This equates to barely 20% of the cost to rent in the centre of Palma." He wants to see help with rents coming from the Balearic government.