global retail tours: barcelona · springfield, a younger fashion retailer owned by grupo cortefiel,...

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DEBORAHWEINSWIG,MANAGINGDIRECTOR,FUNGGLOBALRETAIL&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2016TheFungGroup.Allrightsreserved.

Fung Global Retail & Technology is publishing a series ofGlobalRetailTours,highlightingobservationsfromourvisitsto major cities around the world. This report looks atretailinginBarcelona.Hereareourtoptakeaways:1) OurBarcelonastorevisitsconfirmedthatSpanishretail

is still fragmented: in food and nonfood retail, small-scalespecialistsremainprominent.

2) Multi-channel propositions are scarce in stores: the ElCorte Inglés department store chain is ahead of thepackinpushingbuyonline,collectinstore.

3) Some prominent local apparel retailers—such asSpringfield—are relatively conservative, while others—such as Desigual—are focused on unusual designs.Given this context, it is not hard to see why Inditex’sfashionablebrandshaveflourished.

GLOBAL RETAIL TOURS:

BARCELONA

D E B O R A H W E I N S W I G M a n a g i n g D i r e c t o r ,

F u n g G l o b a l R e t a i l & T e c h n o l o g y d e b o r a h w e i n s w i g @ f u n g 1 9 3 7 . c o m

U S : 6 4 6 . 8 3 9 . 7 0 1 7 H K : 8 5 2 . 6 1 1 9 . 1 7 7 9

C N : 8 6 . 1 8 6 . 1 4 2 0 . 3 0 1 6

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GLOBALRETAILTOURS:BARCELONA

BARCELONAKEYFACTS 2015

Population 1.16Million

Area 101.4 sq. km (39.2 sq. mi.) Source:UnitedNationsFung Global Retail & Technology is publishing a series of Global Retail Tours,highlighting observations from our visits to retailers in major cities around theworld.ThiscitybriefingfocusesonobservationsfromourstorevisitsinBarcelona.Thesevisitswereconcentratedontwoareas:thelargeGranVia2shoppingmallinoneof thecity’sbusinessdistrictsand theareaaroundPlaçadeCatalunya incentralBarcelona.Figure1.StoresataGlance

Carrefour:Bringsspectacletofoodretail

ElCorteInglésflagshipstore:Offershugechoice,butishardtonavigateandinneedofinvestment

C&A:Blandstoreenvironmentandanundistinguishedproductoffering

Source:FungGlobalRetail&Technology

DEPARTMENTSTORES

Source:ShutterstockSpainhasonlyonedepartmentstoreretailerofanysignificance,ElCorteInglés,which is owned by a private group of the same name. We visited its 11-floorflagship on Plaça de Catalunya. The store has a comprehensive offering that

FungGlobalRetail&TechnologyispublishingaseriesofGlobalRetailTours,highlightingobservationsfromourvisitstoretailersinmajorcitiesaroundtheworld.

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ranges from DIY to apparel to appliances to food. The company also operatesgrocery stores and a DIY chain, which provides synergies with some of thesedepartments.El Corte Ingléswas theonly Spanish retailerweobserved thatwasprominentlypromoting click-and-collect. Customers using this service can collect purchasesfrom department stores or from the group’s Supercor convenience stores. ThecompanywasalsopromotinganadditionalservicecalledClick&Express2Horas,whichallowscustomers tocollectselectedproductswithin twohoursofplacinganorderonline.Whenwe visited, El Corte Ingléswas also advertising its “For Shopping Lovers”rewardcardforforeignshoppers.Thecardoffersa10%discountonpurchasesaswell as tax refund options for international customers. The retailer has beenactive in pursuing Chinese tourists, aswenoted in our September 2015 report,GlobalChineseShoppers:The$200BillionOpportunity.However,muchofthestoreenvironmentlookedquitedatedandtiredwhenwevisited, and we think high-spending tourists seeking the glamour of upscalebrandswouldbedisappointedwiththeinterioroftheflagship.TheElCorteInglésdepartmentstorechainwashithardduringandaftertherecession:annualsalesdroppedbyaround€1.2billionbetween2010and2013,beforerecoveringslightlyin2014,andthisdeclinehaslimitedthecompany’spossibilitiesforinvestinginitsestate.ElCorteInglés:MainDepartmentStore

Source:FungGlobalRetail&TechnologyOursecondcriticismisthatthisstorewastoughtonavigate,withlittledirectionalsignage, unusually high stocking densities in some apparel areas and hard-to-locateescalators.ElCorte Inglésalsohasanewer, flashier,apparel-onlystore justacrossPlaçadeCatalunyafromitsflagship.Thatstore’smultilingualsignsandtaxrefunddisplaysleftuswith littledoubtthat it isamoreupmarketofferingdesignedtocater, inlargepart,toforeigntourists.Thesmartinteriorswouldcertainlyappealmoretohigh-spendingvisitors thantheratherdrab flagshipstore’swould,andtheyalsodomorejusticetothearrayofbrandsonoffer.

ElCorteInglésalsohasanewer,flashier,apparel-onlystorejustacrossPlaçadeCatalunyafromitsflagship.

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ElCorteInglés:SmallerapparelStore

Source:FungGlobalRetail&TechnologyCLOTHINGSPECIALISTS

TwoofthemostprominentSpanishclothingstoreswetouredwereDesigualandSpringfield.Theycouldhardlyhavebeenmoredifferent.Desigual specializes in vibrant, multicolored clothing, and its stores abound inBarcelona:we counted three in the Plaça de Catalunya area alone aswell as aconcessioninElCorteInglés’sfashionstorenearby.Unlessthisbrandisasurprisehit with tourists, it is hard to see how the niche appeal of its unusual designscouldjustifysomuchspaceinonearea.Springfield, a younger fashion retailer owned byGrupo Cortefiel, ismuchmoreconventional.Wevisitedtwoofitsstores,oneattheGranVia2mallandonenearPlaçadeCatalunya.Thelatterwasamorevisuallyappealingstore,butbothwereultimately quite conservative, with unremarkable store environments andrelativelymiddle-groundproduct.Springfield,Barcelona

Source:FungGlobalRetail&Technology

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We also visited several stores from the Inditex family, including Zara,MassimoDutti,BershkaandPull&Bear.Thesestoreslookthesametheworldover—theglossy look of Zara and the premium atmosphere ofMassimoDutti are part oftheir edge over more middle-ground rivals. The noticeable difference to a UKvisitor is the pricing: Inditex’s pricing policy is almost pound-for-euro, meaningpricesarefarmorecompetitiveintheeurozonethantheyareintheUK(note:wevisitedbefore thedevaluationof thepound following theUK’sEU referendum).WenotedasimilarpricedisparityrelativetotheUKatH&M.Figure2.Entry-LevelPricingatSelectedApparelRetailers(EUR)

Men’sPlainCrewneckT-Shirt

Men’sJeans

Benetton N/A 34.95Bershka 4.99 19.99C&A 6.90 29.90H&M 4.99 19.99Jules 7.99 25.99MassimoDutti N/A 39.99NewYorker 2.95 19.95Pull&Bear 4.99 19.99Springfield 7.99 19.99Zara 5.99 29.99Pricingisforlowestnon-salepriceavailableinstore.Source:FungGlobalRetail&Technology

C&A,Barcelona

Source:FungGlobalRetail&TechnologyInternationalretailerswevisitedincludeJDSportsandC&A. JDSports,fromtheUK, was one of the very few retailers we saw using order screens in its store.Dutch retailerMSMode,which featureda similar typeofonlineorderingkiosk,wasanother.

Inditex’spricingpolicyisalmostpound-for-euro,meaningpricesarefarmorecompetitiveintheeurozonethantheyareintheUK.

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JDSports,Barcelona

Source:FungGlobalRetail&TechnologyC&A,fromGermany/theNetherlands,offeredadisappointingstoreenvironment.Lackluster store design did little to convince us of its fashion credentials. Theproductwasfirmlymiddlegroundandalthoughthepricingwassharp,itwasnotcompellinglylow.Germany’sNewYorker offered apparel aimed squarely at young shoppers, in arelativelybasicstoreenvironmentwherepricewasthemainsellingpoint.NewYorker,Barcelona

Source:FungGlobalRetail&TechnologyCommon across all these specialists was the absence of a visiblemulti-channelpush.Wesawalmostnoprompts,suchassignageordigitaldisplays,encouraging

Commonacrossthesespecialistswastheabsenceofavisiblemulti-channelpush.

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shoppers to visit awebsiteor use a service such asbuyonline, collect in store.Inditex-ownedBershkawastheonlyexceptiontothisthatweobserved.Bershka,BarcelonaSource:FungGlobalRetail&TechnologyOTHERSPECIALISTRETAILERS

Healthandbeautyspecialistsareprominent inBarcelona.Cosmeticsstoresfromnames such as Sephora, Douglas and Kiko are numerous. These arecomplementedbynaturalbeautystoresfromYvesRocher,LushandRituals,andthepreponderanceofparapharmaciesreflectsthemoreheavilyregulatednatureof healthcare retail in Spain. Some grocery retailers, such as Carrefour, offerparapharmacies, which provide more limited pharmacy services than doindependent pharmacies. The enforced separation of healthcare and beautymeansthereisnomajorcatchalldrugstoreorbeauty-and-pharmacychainofthekindoperatedbyWalgreensintheUSoritssisterfasciaBootsintheUK.

FOODRETAIL

Southern European grocery superstores are rarely less than impressive, andCarrefourdidnotdisappointuswhenwevisiteditssuperstoreattheGranVia2shoppingmall.Attractivedisplaysofcuredhamjoints,cheeses,freshproduceandwinesgaveanimpressionofabundance,astheydidatasmallerCarrefourMarketsupermarketwe visited on Rambla de los Estudios. Counters offered freshly prepared foodsandproducestandardswerehigh.

Theenforcedseparationofhealthcareandbeautymeansthereisnomajorcatchalldrugstoreorbeauty-and-pharmacychain.

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Carrefour,Barcelona

Source:FungGlobalRetail&TechnologyThe large Gran Via 2 Carrefour store featured a wide array of generalmerchandise, spanning electrical goods, books and apparel. In some othercountries,groceryretailershavestruggledwiththeirbigstoresasseveralofthesecategorieshaveshiftedonline.However,Spainseesrelativelylowlevelsofonlineshopping, and the preponderance of general merchandise offered in storesreflectsthis.Both Carrefour stores we visited featured food service prominently: thesuperstore has a café and sushi bar and the supermarket features a food-to-gocounter,abarthatmakesAsianfoodtoorderandasushikitchen.We noted a couple of other features about Barcelona food retail. First, smallsupermarketsarefoundonalmosteverystreet,withbignamessuchasDIAandthe El Corte Inglés group’s Supercor among the most prominent. Second,traditional specialist food retailers, such as greengrocers and bakeries, remaincommon, reflecting the fragmented nature of Spanish retailing and traditionalshoppinghabits.

Spainseesrelativelylowlevelsofonlineshopping,andthepreponderanceofgeneralmerchandiseofferedinstoresreflectsthis.

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DeborahWeinswig,CPAManagingDirectorFungGlobalRetail&TechnologyNewYork:917.655.6790HongKong:852.6119.1779China:86.186.1420.3016deborahweinswig@fung1937.comJohnMercerSeniorAnalyst

HONGKONG:8thFloor,LiFungTower888CheungShaWanRoad,KowloonHongKongTel:85223004406LONDON:242-246MaryleboneRoadLondon,NW16JQUnitedKingdomTel:44(0)2076168988NEWYORK:1359Broadway,9thFloorNewYork,NY10018Tel:6468397017

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global retail tours: barcelona · springfield, a younger fashion retailer owned by grupo cortefiel,...

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