It was one of the most watched moments for Spain’s retail and consumer goods sector. “Here is everyone”, commented the chief executive of a major food company, just before the event opened. The 39th AECOC Consumer Goods Congress brought together about 1,200 leaders from key firms across food, hospitality, supermarkets, cosmetics, electronics, and pharmaceuticals, immediately signaling the challenges and concerns this industry faces. There are issues on the horizon that must be addressed to secure a positive long-term outlook, said Ignacio González, the president of AECOC, the federation that links manufacturers and distributors. Among them are chronically low productivity and persistent absenteeism, an intolerable regulatory burden, taxation, and, on top of that, that families are spending less in a category once considered a staple.
According to González, the economic situation for households has improved. Savings rates and household disposable income are higher, and consumer confidence is rising, he observed, adding to the list of positive signs. The question, he warned, is that major discretionary spending is losing ground to leisure, communications, and culture. We have a consumer who saves what they can in order to spend on what they want, he explained. And we have to be part of what that consumer wants, he concluded, encouraging industry players to roll up their sleeves and help reverse the trend.
Later, in a press conference, the industry leader drilled down further. He described the trend by looking back fifteen years and tied it to the growing weight of tourism and digital platforms. That is why it matters that the sector aligns with what the consumer desires and that brands and stores deliver real value so the willingness to spend returns. Are we very worried about this? Reasonably so, he replied. It is not the number one concern, but it is a priority to watch.
The concern González voiced is that this shift in spending occurs at a moment when households remain cautious with their purchases. Current consumption levels hover only slightly above pre-pandemic figures, about 1.3%, and the drivers are services and durable goods rather than non-durable items, which is the core focus of the sector.
Absence of Next Generation funds and hyper-regulation
In addition, overall investment has risen a modest 1.9% versus the previous year, with capital equipment even in negative territory at around five percent. He questioned where the Next Generation funds should be present, yet remain invisible. The executive also flagged structural concerns such as low productivity, noting that the sector is at a standstill comparable to Spain in the mid-1990s and has effectively lost decades in efficiency. To counter this, he urged more training, stronger digitalization, and an aggressive push to curb absenteeism. He also cited a slate of new rules: waste and packaging, climate change, deforestation, non-financial reporting, sustainable mobility, recurring issues of theft and fraud, artificial intelligence regulation, accessible labeling, and rising payment delays.
Despite these headwinds, González remained optimistic. He pointed to several positive indicators: population growth driven by immigration expands the consumer base, tourism has recovered, wages are rising, and purchasing power is improving. The inflationary crisis seems to be easing. He stated plainly that the worst is behind us, noting that the monthly CPI has already been negative for three consecutive months and that food inflation runs below the general rate, close to zero or even negative. The takeaway for the industry is clear: stay close to what consumers want, invest in capability, and persevere to restore growth in the sector. (Source: AECOC)