The Balearic Federation of Business Owners (Afedeco) warned today, Wednesday, that the traditional sales model is in crisis and called for structural reform of the commercial calendar. The survey, based on 300 telephone and online interviews conducted during the second and third weeks of June, revealed that none of the businesses consulted had recorded an increase in sales compared to the previous year and that 78% of those surveyed rated the start of the summer sales campaign negatively.
In addition, the average spend per purchase in physical stores has fallen from 345 to 313 euros, while online purchases have increased by 15%, with an average spend of 223 euros. These figures, according to Afedeco, confirm that the traditional sales model ‘has lost its effectiveness’ and no longer generates the expected results. The president of the federation, Joana Manresa, stressed that the widespread perception that businesses are still operating is not in line with reality.
‘We are in a period of commercial survival; constant discount campaigns throughout the year have led to promotional fatigue among both consumers and retailers,’ she said. Manresa also pointed out that bringing forward the sales, which in many cases began before 20 June, has hurt local businesses, as they have lost ‘key weeks of profitability’ coinciding with the arrival of tourists.
‘Visitors who come to Mallorca in July or August shop in physical stores, so bringing the sales forward before the bulk of the tourists arrive is, from the perspective of small and medium-sized businesses, a strategic error that can translate into a loss of opportunities,’ she added. The study also reveals that 67% of shops applied discounts of between 20% and 40%, without this having a clear impact on sales.
Sixty-eight per cent of retailers believe that there has been no increase in customer footfall or online traffic compared to last year, and only 2% perceive an improvement. In view of this situation, 67% of shops plan to apply second discounts during August, as a reactive measure to the poor performance of the first phase of the campaign, in many cases with discounts of more than 50%.
Afedeco proposes a structural reform of the commercial calendar that takes into account the current economic and tourist context and protects the viability of local shops. Among its main proposals are to delay the start of the sales to align them with the tourist season when consumption is highest, to regulate covert and permanent promotions by large chains, and to design differentiated campaigns with local value.
Afedeco’s vice-president, Pedro Miró, explained that the federation is proposing that institutions apply specific shopping vouchers for young people between the ages of 18 and 30, as has already been done in previous campaigns aimed at the general public, in order to ‘promote local commerce’ and ‘attract young people. Many young people have never shopped in a physical store. If they are offered a real incentive, they can discover the value of personalised service, professional advice and direct purchasing, something they cannot find online,’ he said.