Internal Trade in Spain: Evolution and Modernization
Internal Trade: Evolution and Modernization
Changes in Supply and Demand
Internal trade has undergone profound changes recently in both supply and demand:
- Changes in demand or consumption: Increased purchasing power due to higher family income, diversification of clientele, dispersion of consumers, decrease in the frequency of purchase, etc.
- Changes in supply or trade: Increasing diversification of products offered to reach more consumers, the spread of new forms of sales, such as supermarkets and large hypermarkets, and the use of new technologies to improve equipment, facilitate trade, and payment.
Types of Domestic Trade
Wholesale Trade
Wholesalers buy products from the manufacturer or another wholesaler, store them, and sell them to retailers, not directly to consumers. They are located in strategic locations in the areas producing and consuming goods and prefer the periphery of cities. Examples include Catalonia, Andalusia, and Madrid.
Retail Trade
Retailers purchase products from manufacturers or wholesalers and sell them directly to the consumer. Their locations have traditionally been the lower trading centers of cities and urban neighborhoods, such as Andalusia, Catalonia, and Madrid. Retail trade shows differences between:
Traditional Retailers
Composed of small, local businesses run by individual entrepreneurs. The facilities are often outdated due to low investment and difficult access to credit. These characteristics explain the crisis that caused the closure of shops or their relocation to urban neighborhoods. Other cases involve the adoption of partnerships of cooperation or franchising. Other forms of traditional trade are weekly agricultural markets in small district capitals, trade fairs in big cities, and street vendors in rural areas.
New Commercial Ways
Self-service: A selling system in which products are available to the client, who takes them and pays upon exiting. It is also the local retailer with sales of less than 2500 square meters.
Department Stores: Have more than 2500 square meters. Hypermarkets include a greater variety of goods than supermarkets and are located in urban centers or peripheries. Large stores sell a minimum of 50,000 references distributed in sections and are located in the center of large cities. Popular stores are a reduced version of large stores that offer cheap everyday products to modest customers and are located in the city center and integrated regional trade centers.
Other New Sales Formulas
These include mail order, teleshopping, vending machine sales, and online sales.
Interior Spaces of Trade
These have the function of selling products and services.
Factors of the location of trade are the existence of a transport system between the producer, the merchant, and the consumer, and a spacious consumer market with adequate purchasing power.
Spanish business areas consist of the geographic area whose population is headed toward a major town to purchase goods that are not necessities.
Internal Trade Policy
The Trade Act recognizes the commercial freedom of movement of goods and regulates commercial aspects.
The Plan to Improve the Quality of Trade tackles the problems of traditional retailing:
In urban areas, the objective is to be more competitive compared to large commercial premises. They promote commercial revitalization of historic centers, cooperation between merchants for shopping or marketing, and quality of facilities.
In rural areas, the aim is to compensate for the reduction of trade decline due to demographic aging. For this, trade is powered in municipalities.