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An Unprecedented Decline in Consumption in the Midst of an Identity Crisis

Consumer spending is currently concentrated in supermarkets with the purchase of food and hygiene products. Meanwhile, the sector expects rental decreases of 10% and the return of opportunistic investors to the market.

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The advance of the pandemic, with one third of the world’s population now confined to their homes, has caused a significant reduction in spending by families and companies, in a context of increasing uncertainty, to levels that are probably ‘unprecedented’ in recent decades, according to the Bank of Spain (BdE).

“The effects are pronounced in tourism, transport and leisure, with an almost complete suspension of hospitality and retail,” said the supervisor in its latest report. “In any case, we will not recover the business we are losing now, but thanks to the measures being taken by the authorities, the fourth quarter could be very similar to that of any other year,” explains Pedro Barrera, Retail Director at Colliers.

The measures will not prevent the future renegotiation of rents down by “up to 10%” and the placing on the market of shopping centres, “because real estate companies and investors will have to rebuild their income statements”, explains a consultant, who does not dare to provide more figures at this uncertain time.

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