MADRID – August is traditionally a month in which Spaniards and tourists flock to the shops to take advantage of the ‘rebajas‘ (sales). This year, however, the textile sector has had to post disappointing figures.
The month of August saw growth of just 3.2%, the second-worst figure of 2023. This weak growth is in stark contrast to July sales figures, which showed an increase of 6.3%. The data comes from the Asociación Empresarial del Comercio Textil, Complementos y Piel (Acotex).
While sales are still up, August marks the second worst month this year, surpassed only by May’s 4.7% decline.
Role of tourism
According to the trade association, the moderate growth in August is mainly due to foreign tourists. Since all international travel restrictions were lifted due to the coronavirus pandemic, they have been the main driver of sales. Moreover, clothing prices in Spain are on average 15% cheaper than in neighbouring countries. This has given the sector a boost when reopening the borders.
Costs and price increases
Acotex president Eduardo Zamácola had already indicated that consumers would see “less aggressive” discounts this summer. The increased costs for the clothing chains, including energy and transport prices, influence pricing. In addition, brands have chosen to pass on some of the cost increases to consumers. This makes the situation extra precarious because there is a lot of stock, but the room for price reductions is smaller.
The bigger picture
Despite August’s disappointing figures, annual sales growth remains positive with an increase of 4.2% compared to the previous year. This suggests that the textile sector is slowly recovering from the blows it suffered during the pandemic years.
The coming months will be characterised by uncertainty. Textile companies hope that the Christmas period will be the turning point for a full recovery of sales. It is expected that, despite lower disposable income and political instability that could impact consumption, consumers will still use the holidays for larger purchases.