The owner of a coffee bar close to to our offices in the Paseo de Mallorca, tells a rather familiar tale. Before the coronavirus his business would be serving hundreds of coffees during the peak breakfast period. These days he says that he is lucky if he serves two dozen. His business is right opposite the main police station so his clients haven´t been hit by the economic crisis. They are earning the same or even more than when the lockdown started. So why has there been such a big drop in trade at this once popular bar?

People are scared to spend their money because they are fearful what the future may hold. Now, this is not good news for the Spanish government. If they were hoping for a consumer-led economic revival the case of this coffee shop rather dents their plans. Imagine other similar businesses around Palma whose clients have now been made redundant or are on reduced working hours; their loss of takings must be enormous.

We all know that this winter is going to be pretty tough, perhaps the toughest the island has seen for many years and this is one of the reasons why people are not spending their pennies, they are afraid to do so. I suspect that it must be a similar story across the country. To avoid this situation perhaps the government should be offering tax breaks for small businesses or even dropping the VAT (IVA) rate to entice clients back. Something needs to be done and fast otherwise many small businesses will be forced to close.


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Yogi / Hace about 1 year

The mentality here is to put prices up! It’s mental and counter to every usual business models but they’ve had it easy here for far too long. A big dose of reality is coming.


Mark Badoer / Hace about 1 year

Totally agree with you Jason, except for one BIG but or addition: tax relief should be for ALL small businesses and not just a few bars, cafe's and restaurants. My business is down 30-40% too, as yachts are not used, so nothing breaks and needs replacement. But no government seems to care about that, if anything they raise taxes (port authority tax). At the moment all aid seems to be aimed at tourist related business and ofcourse the always subsidy and aid hungry farmers and fishermen. All small business should be helped, not just the usual ones who always hold out their aid hands first.


Harry / Hace about 1 year

Instead the government (the local one has no say in the matter) is talking about increasing business owners social contributions, now a minimum of € 300 per month inrespective of the amount made and also IVA on food and drink. Good luck, they are going to need it.