November 24, 2020

big cities and tourist areas are still half gas


In the week of July 13-19, the Spanish used their bank cards as much as the same week the year before. It is, apparently, good news for the Spanish economy, whose consumption after confinement is recovering at a good pace. But you have to go down in detail and take certain figures with tweezers. Firstly, because the card spending data could be overestimated. Cash has been associated with contagion risks and some businesses have eliminated it. That we use the card more does not necessarily mean that we spend the same as in the old normality.

A third of Spanish households would last less than three months if they had to throw away savings

A third of Spanish households would last less than three months if they had to throw away savings

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Both BBVA and Sabadell are publishing aggregated data on the transactions made at their POS. BBVA also includes the cards of its clients. Even the Bank of Spain published this week an analysis on the evolution of consumption based on information from the Card System and Payment Methods, which aggregates all the card regimes that operate in our country. The agency showed the return to normal use of the card and spending with it (both online and in physical) in the last week of June, when the state of alarm and restrictions on mobility ended. In contrast, cash withdrawals “have continued to show very sharp year-on-year declines.”

The tourist provinces, Madrid and Catalonia included, are the slowest. The Balearic Islands and the Canary Islands are at the tail end of the recovery, with activity levels still at 70% and 80% compared to last year. Tourism does not arrive and its effects are seen in foreign card transactions, which in the second week of July had fallen 55% year-on-year throughout Spain. BBVA stands out Alicante (-46%), Canarias (-66%) and Madrid and Barcelona, ​​with falls of over 70%. “In urban destinations, the contraction in tourist demand is even greater,” says his report. The entity predicts a further drop in GDP in 2020 on the Mediterranean coast and the islands off agricultural regions (Castilla-La Mancha, Extremadura and Murcia) and northern Spain.

Activity in the centers of Madrid and Barcelona is below minimum, unlike the peripheral neighborhoods

The decline of urban destinations is seen in the districts of Madrid and Barcelona. Activity in the centers of both is below minimum, unlike the peripheral neighborhoods (Nou Barris and Sant Andreu in Barcelona; Fuencarral, Vicálvaro, Puente de Vallecas and Villaverde in Madrid). “This is a total disaster,” said José Luis Yzuel, President of Hospitality in Spain. “The tourist areas are devastated. Mallorca, Benidorm … The center of Madrid is a lot. The neighborhoods are working better because people want to go out.” The lack of air mobility is noticeable in the Barajas district in Madrid, where card spending barely reaches 33% compared to the previous year.

The tremendous expense in food that we Spaniards do since we confined ourselves could also be altering the photo. Since mid-March, this category has experienced growths of up to 110% year-on-year. Although things have “moderated” in recent weeks, we continue to spend (by card) 42% more than a year ago. Health services and home purchases accompany the recovery of consumption. The latter shot up as soon as the shops reopened, suggesting that there was some accumulated and unmet demand (we wanted to buy, but we couldn’t) and that we equipped our houses because now we are more in them.

The mystery of bars and restaurants

According to the card data, the hospitality industry has already returned to normal. Again, you have to see the detail. Provinces such as Navarra, La Rioja and Asturias pull a lot of the car against the Balearic Islands, the Canary Islands, Madrid, Andalusia and Catalonia. The consulting firm Kantar, which measures consumption through a representative sample of people who report their purchases, estimates the drop in spending outside the home at 50%.

“In summer, extra-domestic consumption is much higher: lunches, dinners, ‘snacks’, coffee and beer at the bar. And that is half,” says Edurne Uranga, director of Consumer. “The beers and soft drinks are recovering, but not the lunches and dinners, the highest tickets. And the menu of the day has collapsed due to teleworking and it is taking a long time to recover.” Yzuel indicates that the global turnover of the hospitality industry “will hardly reach 60%. There has been a rejection of the interiors. On the terraces you have a drink, a skewer, but you do not eat. There are no tourists. And with teleworking there has been The coffee, the omelette skewer and the menu have disappeared. Let’s see how the data evolves. ”

For Uranga, the ‘good news’ is that consumption occasions do not change: what people do not take outside, they take inside. “What happened in the confinement? He moved. The behavior is going to continue like this. Now it is about the players adapting to cover that occasion. That is why home delivery has grown a lot, especially in daily meals, which substitute to the menu. ”

The Bank of Spain foresees “an eventual rebound in household consumption from the summer”, mainly due to the embalmed demand for durable goods: all the large expenses that we have stopped making these months due to confinement and uncertainty. However, the agency warns: the evolution will reflect the “severe impact” of the economic crisis and only measures to protect incomes and help vulnerable families (ERTE and the minimum vital income) will be able to contain it.

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