Spain retail sales decline as inflation impacts household spending

Retail sales in Spain fell by 0.9% in July compared to June, marking the first year-on-year decline for this indicator since November 2022, according to the National Statistics Institute (INE). The decline was observed across various sectors: e-commerce sales dropped by 2.5%, food sales decreased by 0.7%, and non-food products fell by 0.6%. Excluding a 4.4% drop in gas station sales, the overall retail decrease stood at 0.6% month-on-month.

Economic pressure is significantly impacting household consumption. A report by analyst Javier de Antonio indicates that 52% of Spanish citizens have reduced their food consumption due to rising prices. Many households are reportedly cutting back on meat and fish or switching from leading brands to cheaper store brands and white-label alternatives. This shift in spending is driven by rising costs for staples like eggs, fruit, and vegetables, alongside increasing fixed expenses for electricity, gasoline, mortgages, and rent.