Is Corte Ingles really the Spanish Disneyland?

I have never rated the Spanish retail sector with its poor service, over-priced and uninspiring product lines and old-fashioned stores.  But apparently they are the next big tourist attraction.

According to this article - Spain's retailers reboot to pull tourists from shore to store - a big effort is underway by the likes of Mango, Corte Ingles and others to offset falling local sales by attracting more foreign tourists with translators, discounts and targeted advertising.

I find it unlikely that tourists will take the bait.  I certainly don't recognise the description of El Corte Ingles quoted in the article: "it's like a Disney theme park for us ... we spend a whole day in here".

The shopper said that he was Colombian, which makes me think if I ever visit Colombia not to expect too much of their department stores.

I can't think many British visitors would be so impressed with El Corte Ingles.  It's not awful by any means but seems expensive to me and will feel even more so to tourists getting little more than €1 for their pound.

And Spanish shops seem to rarely offer great discounts, especially the supermarkets which I see as a couple of decades behind the British ones that everyone moans about so much.

I have already had a go at Spain's bargain stores (Spanish pound shops need to raise their game).

Perhaps clothes shops might get some joy.  Spanish fashion chains such as Mango and Zara enjoy strong international reputations and might attract some more business with a concerted push.  At certain times of the year their sales can feature meaningful cuts in prices too.

Beyond that I don't see Spain's shops becoming its next tourist attraction.  To get a sorely needed boost to demand from more tourism the country would be better sprucing up tired looking tourist infrastructure, improving the beaches and prioritising good service (see Spanish tourism feels the heat).


From our website: Employing staff in Spain

Spanish pound shops need to raise their game

Britain's pound shops are much better than the Spanish equivalents - the equally ubiquitous but drab and uninspiring "Chino" supermarkets.

This matters because the sector is one of the retail sectors' rare growth sectors in tough economic times.  Spain's consumers and the Spanish economy generally could benefit from a revolution in the cheap and cheerful sector.

The UK pound shop sector has been revolutionised in the recent past with the rise of chains like Poundland and 99p Store. The  additional buying power they have has enabled them to expand their ranges and especially to offer more branded products.

Crucially the big manufacturers have been encouraged to make lines especially for the sector so you get Head and Shoulders shampoo for a pound albeit in slightly smaller bottles.

They are also very dynamic, always looking for new offerings so customers never quite know what to expect.  You often end up going in to buy one thing and coming out with half a dozen bargains.  On my last trip - to stock up on sweets for the kids (honest) - I was delighted to also walk out with two DVDs of the original Spiderman TV series which my kids love and which cost 5 times as much on Amazon.

Even celebs go to Poundland these days according to news reports.  Hard to imagine Spanish celebs going to their local chinese bazaar.  These never have anything branded or different and the presentation is woeful - like the contents of a Chinese container vessel have just been dumped into a cavernous warehouse.  Not everything is that cheap either.

Before the euro came along there were "100 centime" shops (about 60 c) which stuck mostly to the pound shop model, allowing for inflation.  The "hypermarkets" we now get in Spain charge pretty random prices with some of knick-knacks costing 60 or 70 cents but some going up to €1,80 or €2.

The bigger ticket items (like big Christmas present toys or electrical goods) are risky purchases even when the price does seem right as the quality is so variable and there are no guarantees.

I could be way out of touch here and maybe there are Poundland equivalents in parts of Spain that I don't know about.  But in the areas I know Spain is being badly served and needs a bargain-retailing revolution.

From our website:  Taxation of rental properties in Spain

Cheap sugar puffs and other investment tips

Can you make money as an investor eschewing the business press and trusting your own observations and experiences?

Normally I scoff at people who say things like "I'm buying Thomas Cook - people will always go on holiday", completely ignoring the current share price and the company's competitive and financial position.  In fact Thomas Cook is down 90% over the last 2 years; people may always go on holiday but they are also free to book with online competitors.

But a walk down the cereal aisle at Tescos this week did give me an investment insight.

I bought Tesco shares quite heavily in January after their first profit warning in 20 years had caused them to fall by 20% or so in a matter of hours.  I thought the fall overdone and expected to be quickly up on my investment. It turns out I was wrong about that as the shares have hovered around the same level ever since and even gone lower on occasion.

It was a long term investment of course and I can wait.  TSCO yields 4,5% and the significant business that it does outside the UK should ensure that group profits continue to grow and give me a healthy return.

Certainly beats any cash ISA investment I know of.

There is no denying though that Tesco's UK retail core is suffering and its not just the recession. Other supermarkets are doing well and stealing market share.  There are problems with non-food and the bosses admit that they have let standards of service and store presentation slide.

But fundamentally it's a question of their prices.  They have got used to growing by simply opening more stores and retaining customers with gimicky Clubcard offers.

It has been obvious for some time that Tescos has become an expensive place to shop particularly when compared to Asda.  To be fair to the management they recognised this long before the profit warning and acted last year with the Big Price Drop promotion.

The City was lukewarm about the plan and it didn't help much at Christmas when other stores, particularly Sainsburys, won custom with special offers and one off bargains which made Tescos "5p off own-brand cheddar" look a bit weak.

That's where the Honey Monster comes in.  I noticed his Sugar Puffs were an eye-catching £1 under the Big Price Drop sign.  Looking around I saw a host of other meaningful price falls right through the aisles.

What does that say to you?  Management is backing its own judgement and sticking with a strategy that is aimed squarely at the right target - Tesco needs to be genuinely cheaper.  Also they have listened to criticism  and made the campaign stand out more.  Tell'em About the Money! (imagine monster voice)

The news for Tescos has actually been pretty bad this week with an embarassing mice infestation in a London store grabbing the headlines ("Mice refuse to leave sinking ship").  All the articles have trotted out the lines about how Big Price Drop has failed and the company is on the ropes.

But if you take a contrarian view now would be a good time to buy Tescos.  All this bad news is in the price and if the company is still holding its market share (down a mere 0.1% this year) while its everyone's favorite whipping boy and when it is still struggling to get its pricing policy right, what will happen when it puts things right - as I think it is - and the press start to pick on someone else?

From our website:  Massive tax rises for Spain in 2012