Planning approval delays costing Spanish retailers

- Last updated on GMT

Related tags: Spain, Autonomous communities of spain

More than 50 hypermarket developments are stuck in planning hell in
Spain as a result of excessive legislation requirements - prompting
the major retailers to focus on supermarket growth instead.

Investments of €2.7 billion have been put on hold because of delays in the planning approval for 51 Spanish hypermarkets, according to the latest information from the country's retail association, Anged.

According to a report in the Cinco Dias​ newspaper, Anged has now added its voice to the repeated calls from Spain's major hypermarket operators for an improvement in the approval procedure, which is always subject to long delays.

Anged, whose members include El Corte Ingles, Carrefour, Alcampo, Eroski, C&A and Ikea among others, claimed that the 51 projects currently waiting for approval would create more than 17,000 jobs.

The average time to obtain planning permission for a new hypermarket is almost six years, the Spanish retail group said, although in some regions it takes even longer, in particular Cataluna, the Balearics and Andalusia. Madrid is the place where it is easiest to obtain permission.

One of the main reasons for the delays is the vast number of regulations covering the retail sector in Spain - more than 700 in total - and just last week Spain's industry minister Rodrigo Rato warned​ that this excessive legislation was hampering the country's retail competitiveness.

Juan Manuel de Mingo, president of Anged reiterated Rato's claim that the smaller Spanish food retailers, who were supposed to be protected by this legislation from the onset of major retailers, were not in fact benefiting at all. "Only the consumer can help them, and if the consumer does not find the goods he wants in their stores, but can find them in other outlets, be they small, medium or large, there is no law on earth which will make him buy products he does not want just to save the business of the small retailer."​ he said.

According to a report compiled by Anged from data supplied by Nielsen, the excessive level of legislation over the last eight years has restricted growth in the Spanish retail market but has had no beneficial effect at all on the small and medium-sized retailers it was designed to protect.

Part of the problem is the fact that there is a lack of consensus as to what exactly constitutes a 'large store'. In Andalusia, Asturias and Galicia, the definition is stores larger than 2,500 square metres regardless of the size of the community in which the store is located. In the Balearic Islands, on the other had, a store as small as 400 square metres in populations of less than 10,000 people is considered 'large'.

Anged said that every autonomous community in Spain had seen a decline in the number of traditional food stores of between 19 and 33 per cent. Although the number of hypermarkets in Spain had risen during the same period, the organisation said, their market share had in fact declined by 15 per cent.

Related topics: Market Trends

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