Commerce in Alicante Faces Post-Pandemic Turnaround Challenges
The rapid rebound of Alicante’s economy after the pandemic has helped most sectors recover from the restrictions and the sharp drop in consumer activity. Yet after three years, retail remains an area struggling to regain traction. Today there are about 500 fewer businesses than in 2019, a gap driven by several barriers to profitability. Rising costs and inflation keep profits squeezed and sales below pre-crisis levels. Shops owned by individuals nearing retirement have been among the hardest hit as the owner’s exit creates permanent closures while the business has no ready buyer to take over.
Recent figures from the Generalitat Valenciana Statistics Portal show that Alicante now has 13,847 active businesses, down from 14,329 at the end of 2019, before the health crisis. The tally stabilized in 2022, with no new overall closures recorded, but the levels from three years ago have yet to be restored, signaling ongoing market pressure. This persistence highlights the fragility of a sector still adapting to higher costs, shifting consumer behavior, and lingering economic headwinds.
José María Gómez Gras, a professor of Business Organization at Miguel Hernández University in Elche, notes that the hemorrhaging appears to have slowed in light of the latest data, yet inflation remains a negative force. He mentions stores that disappear from the landscape, especially those run by older owners who recognize retirement is near and lack a successor. Many of these shops also have not embraced online sales, making digital transformation a missing link in their recovery.
Paloma Taltavull, a professor of Applied Economic Analysis at the University of Alicante, observes that last year overall economic conditions were reasonably solid, which helped prevent further closures. However, the picture remains incomplete due to rising interest rates and the new financial strains that caught everyone off guard. The reality is that many businesses managed to endure against the odds, a testament to resilience in challenging times.
Traders themselves have direct experiences of the upheaval. Esther González, who operates a clothing store in Alicante, describes the pandemic as devastating with little support available. She recalls having to put her property up as collateral to obtain an ICO loan. Despite difficult beginnings, she remains cautiously optimistic about the tourism-driven rebound and the eventual return of consumer confidence. Her stance reflects a broader sentiment that recovery depends on multiple restoring forces rather than a single policy fix.
Vicente Grau, a gift shop manager, echoes similar concerns about elevated loan costs and rising expenses, particularly electricity and social security contributions. He stresses that price increases are essential to avoid eroding narrow margins and sales, a reminder of the fragile balance many small shops contend with in the current environment. The sentiment is that without adjustments that reflect higher costs, profitable retail remains elusive for small operators.
Finally, Juanjo Cantó, who runs a local food store, points out a shift in shopping patterns that lingers after the crisis. People have increasingly favored department stores for a broader range of products, and current figures still show sales roughly 40 percent below pre-crisis levels. While there are signs of a gradual recovery, the road ahead remains uneven for the Alicante retail landscape.