GIRA Foodservice - Foodservice Market in Spain

GIRA FOODSERVICE published in January 2010 its latest report on the Foodservice Market in Spain.

Download the table of contents by clicking this link and the detailed proposal by clicking this link.

For further information and subscription conditions, send us an email at: agnes.barril@girafoodservice.com

Will the new Spanish flu be lethal to the foodservice market ?

As analysts planned it, the economic impulse that Spain experienced over the last decade has come to a halt. Although warning signs appeared in 2006 and 2007; 2008 - the year of the financial crisis - was the critical turning point for the Spanish economy. Spain that was formerly considered one of the rising stars in the European Union, is now the country with the largest public deficit. However, despite the severity of the recession and the major challenges facing its banking system, Spain's Prime Minister has sought to reassure international investors that Spain is not about to become another Greece.

The "real estate – tourism" fever has contaminated the economy

In Spain, there is a true culture of ownership. A phenomenon that, added to the demand for tourism infrastructure, favours construction, a sector that has became a key element of the economy. The explosion of real estate bubble has resulted in a series of negative effects paralysing progressively the economy. Officially, Spain entered into a recession during the fourth quarter of 2008. Moreover, tourism has suffered from the financial crisis with the number of foreign tourist stays falling 15.9%, especially British tourists.

Overview of the Foodservice market

The social and commercial foodservice market in Spain represents 104 meals per year per inhabitant, the equivalent of 2 meals per week. The average annual spend by Spanish people is approximately 720 Euros (exclusive of VAT). In 2009, the social and commercial foodservice market equated to 4.7 billion meals and 32.75 billion Euros.

The social foodservice market

The social foodservice market is fairly underdeveloped in Spain compared to other European countries and represents only 22% of meals served and 12% of the market value.

The welfare sector continues to be the motor for social foodservice, a dynamism essentially linked to the development of homes for the elderly in response to the aging population together with the positive impact from real estate companies that have invested heavily in this sector. Over the analysed period thanks to favourable demographics, the education sector has also played a major role in market growth. Concerning the healthcare sector, which accounts for a third of the market in terms of meals, the past growth linked to the rise in the number of hospitals, has now slowed, thanks to the decrease in the number of hospitalisation days. Less elastic to fluctuations in the economy, the social market as a whole, remains on a positive trend although progress is moderate.

The commercial foodservice market

The Spanish commercial foodservice market is highly reliable on tourism and economic stability which makes it more sensitive to the current financial crisis.

In spite of the fact that number of restaurants is still increasing, a noticeable contraction has been observed amongst the table service sub segment with the closure of less professional establishments: a phenomenon amplified by the current financial crisis. In these difficult times, the competition has continued to increase. The high density of restaurants in particular in tourist regions, makes the need for differentiation more essential. In order to justify restaurant prices, operators have had to place more effort on the quality of the food offer, alongside service, ambience linked to aggressive meal promotions. Concepts with a value for money offer better orientated to consumers "new" expectations, such as "cafeterías", fast food and self-service restaurants appear to be benefiting most from the current situation.

The hotel industry, the transport sector as well as the leisure & fair segment are also deeply affected by the crisis, thanks to the reduction in business expenditure as budgets are slashed, the drop in the number of tourists in particular from overseas, the cut in the leisure expenditure by families.

On the road to recovery

Growth will be maintained by the social foodservice market, although development will vary across the sectors. Currently, the welfare sector will remain the driving force behind the social foodservice market and will register the largest growth. The B&I sector will be most affected by the crisis following rising unemployment the result of downsizing and the closure of many manufacturing sites. Within the B&I market, the service segment represents the highest potential for sites expansion. Otherwise, education and healthcare segments are not expected to register much growth. However, for contract caterers, these latter segments still offer opportunities as with increasing emphasis on cost establishments will look to outsource more of their peripheral services.

During 2010, the commercial foodservice market, will sustain its current level thanks to the fast food sector which will continue to progress despite the economic slowdown. By 2012, a market rebound is anticipated. As by then the market will be healthier having benefited from the exit of poorer performing less professional operators together with improvements to the food offer, the return of tourists and the restoration in the purchasing power for the Spanish population. All commercial foodservice sectors will at least return to their 2008 level in terms of meals served. For chains and foodservice operators, the main focus lies in the table service, quick service restaurants where the opportunity for a more structured market is still important. Moreover, some transport segments such as on train, airports, railway stations and motorway facilities, with the emphasis on authentic living and leisure space where foodservice is central have potential for growth.

The Spanish combative nature will be an important tool for getting through this difficult period

GIRA FOODSERVICE published in January 2010 its latest report about the Foodservice Market in Spain.

Download the table of contents by clicking this link and the detailed proposal by clicking this link.

For further information and subscription conditions, send us an email at: agnes.barril@girafoodservice.com