THE retail sector claims that the festive sales period this year was one of the worst since 2008 and that with over 90'000 people out of work, there is not going to be too much spare cash flying around to be spent at the winter sales which begin in the Balearics today.
But, even though consumer confidence has taken a further blow in the Balearics, local retailers are quietly optimistic that the sales could be better than expected. Apparently in Madrid, where the sales began at the start of the month ahead of the Three Kings, trading in the winter sales has been brisk and some sectors of the Balearics retail sector are confident that a similar up lift in high street activity will be witnessed here.
One thing there is no doubt about is the huge savings to be had.
This year's winter sales are being tipped as being the most price aggressive ever with product prices being slashed by between 50 and 70 percent from the very first day. Yesterday, despite the shops being closed, their windows were all dressed up for the sales and in the centre of Palma, some were offering 70 and 80 percent savings.
The President of the PIMECO small to medium retail association, Bernat Coll, said yesterday that there is so much unsold winter stock that shifting it is the main priority of many of his members and that is going to involve offering massive discounts.
YET TO HIT ROCK BOTTOM
Coll said that retail sales have yet to hit rock bottom but many have found it extremely difficult to match month-on-month sales this year.
However, he is confident that winter sales trade will not be any worse than last year.
The President of the Balearic Federation of Commercial Businesses (Afedeco), Bartomeu Servera, said yesterday that his sector, which includes the super and department stores, is in a similar position with a lot of unsold stock which has got to be sold.
He hinted that textiles is where some of the biggest savings are going to be found during the first few days of the sales.
However, a number of shops began offering discounts of 20 and 30 percent some weeks ago in an attempt to cash in on the Christmas and Three Kings trade.
Technically, discounts can only be offered during the two government approved sales periods, but under the pressure of the recession which has gripped the high streets for the past two years, many retailers have been left with no choice but to try and boost trade by offering early savings.
Servera said that the economic situation has, in many cases, literally stopped families from spending.
They've lost their spending power, he said yesterday.
It's not that they don't want to spend, in many cases, they quite simply can't, he added.
But, he was also quick to stress that the retail sector is in an equally tough position and revealed that some sectors will be slashing their prices to such an extent they will be shifting winter stock at a loss.
Small to medium sized retailers will not be taking on extra staff this year.
Traditionally, the summer and winter sales is an opportunity for some extra part time employment, something which would not go amiss under the current climate in the Balearics, but only the department stores like El Corte Inglés, have reinforced their festive and winter sales work force.
Coll said that many of his members can not afford to take on extra staff and have decided to try and take care of the extra trade themselves.
According to FUCI, the Federation of Independent Consumers, Balearic consumers are expected to spend an average of 82 euros at the sales - 8.8 percent less than last year.
The retail sector, on the whole, hopes that the winter sales will finally serve to lift the gloom on the high street and also boost their takings.