Spain European Market Insight

SPAIN

FRANCE UK GERMANY ITALY SWISS AUSTRIA Spaniards are out and about again. Spending has increased and boardsports stores are getting their share. Their main concern is sourcing the stock needed to meet the demand.

The pandemic sent Spain’s economy back in time by a couple of years. Companies had their own digital and structural revolution that has prompted great acceleration. GDP growth could reach 9% in the coming quarters, higher than the most optimistic official forecasts. Two main factors are driving it. One is the recovery fund from the EU. The other is private spending. Empowered by vaccination and a longing for normality, Spaniards are back out eating and shopping.

Spain chose to mask people up even outdoors but keep shops open. Remaining open during a popularity boom of boardsports has resulted in good business all year round. Travel bans reduced the number of tourists, but locals proved enough to make a living. Stores on the coast added sales from homeworking foreigners. These nomads fled their homelands’ lockdown to be close to their favourite break. However, international tourists will be welcome this summer. The new vaccination passport for EU residents allows them to enter Spain without taking a test. This promises a good influx in the coming months.

Outdoor sports are still the most popular choice of spare time activities. Water sports has added appeal, as they can be practised without a mask. Anyone with access to the beach took up surfing, kiteboarding, paddleboarding or wing foiling. An upcoming discipline last Summer, wing foiling has experienced incredible growth. Daniele Olivieri from KTS in Tarifa says: “In terms of growth, compared to last year, wing foiling surpasses kite”. Surf has maintained its popularity. Many youngsters who tried surfing in the summer kept it up over the winter. It replaced cancelled training for team sports such as football. The young are also driving the growth of skateboarding. Most kids aged 8-12 that took it up last year have kept it up. Whenever a sport explodes in popularity, just 20% of loyalty causes a giant leap in the industry’s growth. “We’ve seen it happen before, with video games”, says Miki Parets from Shine in Mallorca. “Now the Olympic Games will increase the visibility of skateboarding”. Surf shops talk about increased accessories and wetsuits sales because of the larger fan base. “People with a functioning board invest in grips, fins or leashes to freshen up its look”, reflects Tito Moro from Hawaii in San Sebastián. Wetsuits are used more often and all year round. Wear and tear, changes in body size and in water temperature drive new surf fans to the shops.

Lack of stock is casting a shadow over the industry. Brands have not met the increased demand from consumers. Deliveries are delayed and rarely make it over 60% of the original order. Pre-orders are the only way to secure stock. Some surf brands are already taking SS22 orders without samples or even locking down the pricing. There is talk about scarcity of raw materials. Other explanations point to brands not producing all that is ordered for fear of a bullwhip effect. Whatever the reason, the reality is that production has not met the market’s growth. For stores, the only thing worse than no clients, is a lot of clients and no product to sell them. The increase in online sales during the pandemic might also have an influence. Brands could be securing stock for their D2C business, at the cost of serving their brick-andmortar dealers. This strategy should be handled with care. Offline business remains important in an industry where professional advice secures sales. When a specialised shop recommends a brand, it legitimises it. Having the right product and being able to sell it at a proper margin is vital for stores. Tito offers a good analogy: “This business is like a motorcycle race. One is the pilot, the other the mechanic. Between them both the race is won”.

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