The year 2009 was very tense in Spain for signs

Interview with Ricardo RUSTARAZO, President and CEO Retail & Trade Marketing and partner of Eurelia (European Federation of Retailers) in Spain and the Portugal.

The year 2009 was very tense in Spain for signs. 2010 offers better prospects After a year 2008 already negative (-6,5 on 2007), 2009 was again difficult for our signs (-5,8 drop), with the exception of a few sectors that are able to return to the trend. December was the only positive month ( 3.7), but on a month of December 2008, already very low. The crisis has affected all over the country; but Northeastern (La Rioja, Navarre, country Vasco,...) has a little better withstood, because less dependent on real estate and tourism than other regions like Valencia, the Canary Islands, the Balearic Islands and Andalusia. Have also resilient cities (Valladolid, Logroño,...) who have not known recent opening of shopping centre, and whose commercial equipment did not have the context of crisis and upheaval, and adjustment. It is not significantly difference in momentum between the malls and market streets. In effect, if some centres suffer (cf.), others recently opened conversely have evolved in positive light. Outlook 2010 do not provide for return of growth. Signs hope at best, a judgment of the fall and one turnover identical to 2009: the Spanish economy in the medium-term is still difficult (financial crisis, unemployment, decline in the touring).

The future increase in VAT will 2010 have impact Yes, the chain may bear the impact: If the decision is indeed taken, they will likely bear the increase and should not pass the increase on the price, so that the consumer feels not effect; What will be even heavier for them at this time of crisis.

We attended many closures of stores in 2009 2010 will bring such a resumption in the developments of signs In 2008, and then in 2009, signs have been forced to restructure their networks, with management of their stores portfolio. Financial rebalancing of the strings is operated via the closure of the smaller stores, and the renegotiation of the levels of rent until a sustainable effort rate, become unavoidable to correlate to falling sales. In 2010, the majority of the signs continue closures; they will work on the restructuring of existing stores to transform networks in depth. Only a few signs will continue to grow, with great caution.

How the signs adapt them to resist and to cope with the crisis The signs are facing a major challenge: the sharp drop in the purchasing power of the consumer, with a 19 unemployment. It now search promotions and focuses its purchase periods: it has become more volatile, focused on the price and the quality-price ratio. Also, in addition to drastic cost (purchase, rental, enveloped) control, they are working on the range to offer new attractive products of good quality/price ratio, logistics, and supply of stores to avoid breaks in a context where sales are highly variable one month on the other. Motivation and constant mobilization teams, the loyalty and promotion programs to the consumer, the increase in the interaction with clients and the development of services for certain concepts, are also other major axes. With the perverse effect of course promotions (margins, change in the behaviour of the consumer...).

At the press conference pre - Mapic 2009 PROCOS - EURELIA - RETAIL & TRADE MARKETING in the European Commercial real estate, Retail & Trade Marketing announced a brutal judgment coup in shopping centres projects: confirms for 2010 and 2011 Yes, it will continue due to funding problems faced by developers, some of them had indeed disappeared with the crisis. Developers encounter serious difficulties in attracting the signs, they are become very selective. Marketing is more guaranteed, and the minimum threshold of pre-market for funding is hard to reach for a promoter.

Can you characterize this judgment of beneficial insofar as the major Spanish cities are already equipped in malls Or conversely, problem for signs research opportunities The question is difficult, and use the comparison "classic" in the number of m GLA per capita with other European countries is not relevant to determine the potential for new projects in Spain. Because it must rather take into account our planning (residential and commercial), our way of life and consumption, the richness of our town centres and the role of El Corte Ingles in the streets, the rise of supermarkets (including "soft discount")... and the differences in political sensitivity on the retail trade. All these parameters clearly indicate for the future, a refocusing on the proximity and the city centre, although there are still a few major projects galleries on large cities (Zaragoza, La Coruña, Las Palmas, Jerez, Valladolid,...)

Observed as in other European countries affected by the crisis, a drop of market rents Donors adjust their financial conditions at this time of crisis Are new rents accessible Rent of new projects have indeed been adjusted: signs, more severe in their selection criteria, have begun to renegotiate these values as of 2008, to defend their operating account. Similarly, the principle of variable rent began to be considered, with vision of transformation in fixed horizon 2 or 3 years. For existing centres, there has also been agreements, but rather temporary reductions in rent (6 months, 1 an). Lastly, in General, the terms offered are more flexible in the downtown and shopping centre.