• The Spanish economy is improving. The recession was devastating for retailers. But Spain has turned a corner and GDP is now growing steadily but gradually. In 2014 it rose by 1.4%.

• Consumer and retailer confidence have also broadly been rising, signalling greater willingness to spend after a difficult period.

• Total consumer spending grew in Spain in 2014, by 2.3% according to quarterly figures from Eurostat. This follows two years of falling spending.

• Inflation in clothing, a key department store category, has been erratic over the last year, but was in clear descent over winter 2014/15. All other categories important to the department store category were deflationary across 2014.

• Beauty is a core product category for Spain’s only department store chain, El Corte Inglés.

• Over 50% of respondents said they had bought beauty products from a department store in the previous 12 months, our consumer research shows.

• Department store El Corte Inglés is the most popular retailer of clothing in Spain according to our consumer research.

• In terms of value sales we believe department stores take around 14% of the clothing market.

• El Corte Inglés sales stood at €8,650 million in 2014, we estimate, and as it is the only department store retailer in the country, this in effect represents department store sector sales.

• El Corte Inglés’ actual sales fell by 12.5% between 2009/10 and 2013/14. However, the level of decline eased in 2013/14 and we estimate that there will have been a return to positive growth in 2014/15.

• In 2014 mixed goods retailers’ sales returned to positive growth for the first time in over five years with a gain of 1.5% to reach €11.7 billion.

• We expect the positive trend to be short-lived however, with sales falling back by a similar percentage in 2015.

• El Corte Inglés is the only player of note in the Spanish department store sector.

• After several years of plummeting sales, the decline at El Corte Inglés eased in 2013.

• We estimate that it has continued on the road to recovery, and growth will have turned positive in 2014.

• ECI’s share of the mixed goods sector has grown consistently despite years of falling sales.

• The percentage of Spanish consumers buying products commonly sold at a department store online is low compared to both the EU average and the national total for any goods or services.

• According to comScore data, the website for sole Spanish department store, El Corte Inglés, is a popular destination recording the third highest number of total visitors, only behind Amazon and eBay.

• When it comes to shopping at department stores in Spain El Corte Inglés is the only option and some 57% of the population say that they have bought goods from the business either online or from a physical store.

• The conversion rate of browsers to buyers in-store is much greater than that online. A customer in the store is more than twice as likely to buy as to leave the store without having made a purchase. While online those that visited and bought amount to only just over one-third of those that visited but didn’t purchase.

• Breaking that data down by age reveals that the younger age groups are significantly more likely than older ones to visit a store and yet not buy anything. It would seem that ECI is not converting as many of its young visitors into buyers.

Figure 1: Spain: The consumer: Type of store bought from in the last six months, February 2015

Base: 1,000 Spanish internet users 16+

* eg Selfridges in the UK, Galeries Lafayette in France, Galeria Kaufhof in Germany

Source: Lightspeed GMI/Mintel

• The attitude that stands out when consumers are asked about shopping at department stores, which in Spain essentially equates to shopping at El Corte Inglés, is “I would like the store to match other retailers’ prices on identical items”. Almost 60% of respondents held this view.

• In terms of online shopping one-third of our sample are interested in shopping online or being offered a wider range online. Only slightly less (29%) say they sometimes find it hard to find what they are looking for online. More than a quarter (27%) would like more options in terms of delivery and collection of online orders.

• The under 25s are much more likely than average to say they’d like to see a bigger online offer from department stores, and that they’d like more options for online delivery and collection. 42% of under 25s agree with each of these two attitudes.

• 32% of respondents would like to see a more fashionable offer in Spain’s department stores and 26% would like to see more clothing to suit their age.

• The under 25s are much more likely to say they’d like to see a more fashionable clothing offer and they’d like to see more clothing suited to their age. It appears that the young are feeling that department stores, and so presumably El Corte Inglés are still not catering for them.

The Spanish department store sector is unusual in that there is only one retailer, El Corte Inglés. However, that is not to say that it has it easy. In recent years it has seen its sales haemorrhage as the Spanish economy buckled and consumer confidence dropped through the floor. It also faces stiff competition in its key product categories from specialists, specifically in clothing and household goods.

But the economy has turned a corner just as there have been major changes in the management of El Corte Inglés, and this, along with the company’s keenness to offer a well-rounded multichannel offer suggest that the future is looking brighter. However, ECI cannot afford to be complacent, and our consumer research clearly suggests that it could benefit from looking to broaden its appeal to the less well off, and that it could do more to convert younger visitors to shoppers.