Spain: Distributing a product

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Distribution

Types of Outlet

Hypermarkets, supermarkets and superettes: Located in city outskirts. Both food and non-food products are found here. Superettes are smaller retail outlets than supermarkets and are located in cities.
Carrefour, Eroski, Alcampo
Specialized superstores: Hypermarkets specializing in a family of products.
Pronovias (wedding dresses), Fnac Spain (cultural products), Decathlon (sports goods).
Departmental stores: Located downtown on several floors. There are different specialized departments.
El Corte Ingles
Shopping centers: Located in city outskirts or downtown. Usually you find a hypermarket and a shopping mall here.
Madrid Shopping Centers
Discount: Mainly for food products. They offer distributor brand products or unbranded products. They are preferred for their discount prices.
Lidl, Aldi, Dia
Retail traders: Local specialized stores: grocery store, butcher's store, fish shop, fruits and vegetables store, cheese store, delicatessen, baker's store, cake store, florists. Preferred for the quality of their products, the human touch and their suggestions and advice.

Evolution of the Retail Sector

Growth and Regulation: Both globally and nationally, the scope and impact of COVID-19 remains uncertain and is rapidly evolving. The retail competitive landscape in Spain remained highly diversified in 2021, led by major grocery retailers. Grocery retail is the most important retail channel in Spain, representing more than half of total store-based retailing value sales. In 2020, the food processing industry recorded a turnover of $157 billion, accounting for 2% of GDP (USDA).

While hypermarkets and larger sized supermarkets control a large share of sales, small sized supermarkets located in urban areas are becoming ever more popular due to their proximity to the consumer (generally located within walking distance of residential and/or business areas). Supermarkets and self-service stores are consumers’ prefered channel, accounting for 47.6% of total food purchases in 2020 (MAPA). According to Euromonitor, in 2019, supermarket sales increased by 4% in current value terms to reach 60.3 billion euros. Supermarket sales are expected to increase 3% in the next five years.

Convenience stores are very popular for last minute purchases. The sales through this kind of store have largely benefited from increasingly busy lifestyles. The main advantage pointed out by convenience store consumers include their opening hours (open longer hours than other stores). However, these stores are going through a rough time due to their high prices.

Traditional markets are composed of corner grocery stores, open-air markets and regional markets. Wholesalers are the main suppliers for traditional markets. Usually, the corner grocery stores are family owned and located within residential and/or neighborhood areas. Although they are small, they usually carry a diversified range of food and cleaning products. Sanitary conditions are good and most have a small refrigeration area. Although their prices are usually higher than in any other type of outlet, they are quite popular for their high quality fresh produce and their proximity.

The leading online retail channel in 2020 remained Amazon with a 19.4% value share of the market (Agriculture and Agri-Food Canada). According to Euromonitor, food and drink products are the most popular product type sold via internet retailing in Spain. More families, particularly in the big urban areas, save time buying their groceries online. Still, the importance of internet retailing within grocery retailing has plenty of room to grow.
Market share: Distribution in Spain is still characterized by a large number of retailers and traditional stores. Hypermarkets/supermarkets, convenience stores, major discount stores and specialized stores coexist with traditional corner grocery stores and open-air markets.
In 2021, grocery retail distribution was dominated by:
•    Mercadona SA (supermarkets) with EUR 25.5 billion sales in 2021 and 26.7% market shares
•    Carrefour (hypermarkets, supermarkets, discount stores) : 7.3% market shares
•    Grupo Eroski (hypermarkets and supermarkets) : 4.5% market shares
•    Auchan retail : 3% market shares
•    Lidl supermercados (discount store) : 5.8% market shares
•    Dia retail (discount store) : 5.4% market shares
•    Consum : 3.4% market shares
Retail Sector Organisations: National Association of Mass Distribution Companies (ANGED)
Spanish Food and Drink Industry Federation
Spanish Chamber of Commerce

E-commerce

Internet access: Spain is the fifth most populated country in the EU, with a population of 46.5 million people, out of which 80% uses the internet. It is also one of the fastest-growing e-commerce markets in the region. User penetration is at 53.4% in 2018 and it is expected to hit 65.9% by 2022. According to Eurostat, 69% of all internet users in Spain access it daily. In 2017, the number of smartphone users in Spain was 30.3 million. That number is predicted to grow by 7.7 million to 34.3 million users in 2021, according to Statista estimates. The operating system market in Spain is dominated by Android with a percentage of 89.4 of the market in January 2017. As for the web search engines, the most popular ones are Google (95.44%), Bing (3.08%), Yahoo! (1.2%), DuckDuckGo (0.13%), MSN (0.06%) and Baidu (0.02%).
E-commerce market: E-commerce turnover in Spain has increased in the second quarter of 2017, with a year-on-year growth of 23.4% to total 7.338 billion euros, according to the latest e-commerce data available on the CNMCData website. In 2017, Spanish B2C e-commerce turnover grew by 8% to €28 billion. Spain had an online population of 37,8 million people who were aged 15 and older. Of the total online population, 26.1 million bought something online in 2017. The large majority of cross border e-commerce is completed with other EU countries, representing over 92% of the total cross-border amount. Broken down into number of transactions, 44.2% of sales were registered on Spanish websites and 55.8% on foreign websites in the second quarter of 2017.
Social media: According to an April 2017 report by the Interactive Advertising Bureau Spain (IAB Spain), Facebook was used by 91% of social media users ages 16 to 65, while WhatsApp came in second at 89% of respondents. WhatsApp users spent an average of over five hours per week on WhatsApp—more time than users of any other platform. The most popular social networks in Spain are Facebook (71,42%), Pinterest (9,81%), Twitter (7,5%), YouTube (5%), Instagram (4,8%) and Tumblr (0,79%). eMarketer estimates that 61.9% of internet users and 45% of the population in Spain will be social network users in 2018. Both figures are low for Western Europe.

Distance selling

Evolution of the Sector: According to the World Federation of Direct Selling Associations, Spain had 250,670 independent representatives and 872 million USD in direct retail sales during 2017, a 0.8% drop compared to 2016. These sales were divided by sector as follows: cosmetics and personal care (30%); wellness (30%); home care (14%); clothing and accessories (12%); household goods and durables (5%); and books, toys, stationary, etc. (5%), among others.

According to Euromonitor International, direct sellers contact current and potential clients via apps, official websites, WhatsApp, and social media to handle payments, delivery, and customer service. Furthermore, most direct sellers are women due to the low barriers of entry and company support, most work on a part-time basis, and many are required to become self-employed for tax purposes if their turnover is greater than the Spanish minimum salary.

Euromonitor International claims Vorwerk España is the largest direct selling company given the success of its Thermomix product (Spain is the fourth largest consumer of this product). Herbalife International de España also has a large number of direct sellers and aggressive marketing.

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