Spain’s retail industry has emerged as the third most affected sector by insolvencies, according to the latest Flash Sectorial report published by Solunion. While the broader economy is showing tentative signs of recovery, many retailers — particularly smaller, traditional outlets — continue to struggle amid changing consumer habits and fragile confidence.
The report reveals that although household consumption grew by 0.4% in the first quarter of 2025, this was a slight slowdown compared to the 0.8% recorded in the previous quarter. More significantly, real food consumption volumes fell by 0.2%, despite stable prices. This trend suggests that many Spanish households are continuing to curb spending or adopt more cautious shopping behaviours.
Analysts attribute the situation to persistent economic uncertainty, both domestic and global. Rising interest rates, geopolitical instability, and concerns over employment have led consumers to increase savings and limit non-essential purchases. Meanwhile, retail insolvencies remain disproportionately high compared to other service sectors, particularly among independent stores with low digital presence.
Despite these challenges, the report also highlights notable positives. Retail sales, adjusted for inflation, rose 4.8% year-on-year in May, showing that when consumers do spend, they are doing so more confidently than in 2024. Employment in retail also increased by 1.4%, with seasonal hiring in fashion and household goods playing a key role.
Digitalisation remains both a challenge and opportunity. E-commerce continues to grow at a faster rate than physical retail, but many smaller Spanish businesses have been slow to invest in online infrastructure or marketing. Solunion’s report encourages retailers to embrace omnichannel strategies and innovation if they are to compete with larger, more agile market players.
Retail associations have called for targeted government support to help stabilise struggling outlets, including tax incentives for digital transition, simplified licensing procedures, and better access to microcredit.
The mixed picture reflects a sector in transition: squeezed by economic headwinds on one side, but bolstered by selective consumer confidence and a growing appetite for more flexible, experience-driven shopping on the other.
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