Spanish retail growth curbed by 'excessive' legislation

The high level of legislation governing the Spanish retail sector could impact competitiveness and end up hindering development rather than helping it. This is the stark claim made by Spain's Finance Minister Rodrigo Rato speaking earlier this week in Madrid.

Rato was one of the main speakers at a conference discussing trends in European retailing organised by The Economist​ and by the Spanish retail association, Anged.

In his speech to the conference, he called on the Spanish authorities to look at ways of simplifying the "excessive"​ legislation, arguing that the steady increase in the number of laws governing the retail trade had been bad for both companies, which faced increased costs, and for consumers, to whom these costs are passed on in higher prices.

According to a report in the Cinco Dias​ newspaper, Rato said he was in favour of greater flexibility when it came to retail practices, and to a liberalisation of shop opening hours in Spain, in order to better suit the demands of today's modern consumer.

Another factor which has impacted the Spanish retail sector in the last few months has been the increase in prices, in part due to the introduction of the euro at the start of 2002. He said companies should do all they can to ensure that consumers are not impacted by higher prices, even if this meant keeping margin growth down.

But despite all these potential problems, Rato said that the Spanish retail sector had shown good growth in the last year. It showed growth in excess of that of all Spanish industry as a whole, accounted for 14 per cent of the country's GNP, employed 17 per cent of the population and has shown itself to be highly flexible in the face of constantly changing consumer demands and fluctuating economic conditions.

The conference was also attended by Alejo Vidal Quadras, vice-president of the European Commission, who was quick to criticise the recent decision by the Catalan regional authorities in Spain to impose a tax on large retail outlets.

According to the paper, he said that this would simply serve to reduce competition in the Catalan market, and that it was highly inappropriate at a time when the aspirant members of the European Union were being urged to drop similar taxes in their countries.

Anged, whose members include all the leading Spanish food retailers (including El Corte Ingles, Carrefour, Alcampo and Eroski), has already made a petition to the European Commission, claiming that the Catalan law was anti-competitive.

Anged's president, Juan de Mingo, said he was saddened by the actions of several of Spain's autonomous regions in placing temporary bans on the construction of new hypermarkets. He added that the supposed beneficiaries of these laws - smaller retailers - had not in fact profited from them at all -instead, they had lost 50 per cent of their market share in the last seven years, almost all of it to supermarkets who are not covered by the regulations.