The multi-product industry becomes more important in economic terms

Between 24th and 26th May, MULTI-PRODUCT-SELECTION - TOYS will bring together the main representatives from the sector at FERIA DE MADRID

Multi-product outlets offer an immediate response to new consumer habits and developments within society. The radical changes that have been witnessed by the distribution sector and the retail trade have come about, among other factors, due to the incorporation of women into the labour market, the need for a longer shopping timetable with a large proportion of weekly purchases taking place on the weekend, and immigration, which has led to new consumer needs. These transformations are faithfully reflected in the new demands of consumers.

The multi-product trade currently has an estimated turnover of more than 6,000 million euros, based on a range of products that is improving in terms of quality and innovation each season. The multi-product trade has still not reached its point of maturity, as we can observe at the development of the fair, MULTI-PRODUCT-SELECTION - TOYS, which will take place between 24th and 26th May at FERIA DE MADRID, bringing together the products and services of the leading Spanish and foreign wholesalers, manufacturers, importers and exporters within the sector.

The selection of products on show includes items ranging from the latest trends in decoration, household furnishings, gifts, stationery, textiles, DIY products and accessories to an extensive variety of items relating to the summer, Halloween and Christmas sales campaigns. On this occasion, the toy sector will also receive a boost, based on an exhibition of the most innovative ideas relating to children, young people and the beginning of the school year.

A New Retail Trade Profile

One of the most obvious changes regarding the profile of the retail trade is the proliferation of multi-product shops in recent years, establishments that offer some highly competitive prices. We can observe the greatest predominance and most rapid rates of expansion in the large population centres. According to figures furnished by the Spanish Ministry for Industry, Trade and Tourism, more than 16,000 establishments of this kind exist in Spain, concentrated in the regions of Andalusia, the Canary Islands, Valencia, Madrid, Murcia and the Basque Country.

The popularity of multi-product shops can be explained by a new trend, one that dictates that purchasing items at a good price is an intelligent action, irrespective of the social status of the purchaser. Furthermore, shops of this kind offer consumers the opportunity to purchase all kinds of mass consumer products at a lower price than other shops and within a more extensive timetable.

The Characteristics of Multi-Product Shops

The average age of these retail establishments is around seven years, although approximately one third of shops have been in existence for less than three years, which simply confirms the considerable growth that the sector has enjoyed in recent years.

The average size of these establishments is 119 square metres and only one out of every ten premises is more than 200 square metres in size, although Madrid doubles the nationwide percentage of outlets that measure less than 50 square metres, due to the high cost of trading premises.

The owners' profile is either Spanish or Asian, aged between 25 and 45 years and possessing primary or secondary studies. Owners do not have any specific training in commerce. The age factor confirms the expansion of the sector, based on the introduction of a number of new and relatively young traders who are likely to guarantee the survival of the business in the medium term.

According to the latest figures, more than 60 per cent of multi-product shops have 1 or 2 employees. We might highlight the high number of employees in Madrid, where 22 per cent of shops have more than 3 employees. We might also mention that the majority of employees are Spanish or Asian, followed, in order of importance, by groups of Latin American extraction and by Pakistanis, whilst 10 per cent of the overall number of employees are Indian, Iranian or Korean.

The typical customer of multi-product outlets is a woman between 20 and 50 years of age, whilst male customers only account for 33 per cent of the total. With regard to the customer breakdown according to age, the largest group consists of customers between 35 and 50 years of age, with the other most typical group consisting of customers between 20 and 35 years of age.

Cleaning products, stationery, gardening products, household furnishings, accessories, toys, perfumes and decorative items are the most typical goods sold in these shops and present a wide variety of ranges, the first three being the products that are replaced most frequently.

With regard to supplies, 77 per cent of owners claim that they have more than one supplier. All of the respondents stated that they are supplied by wholesalers and, among these, the breakdown is as follows: one third are importers (34.2%); somewhat more than one fifth are distributors (21.6%) and sell to other wholesalers; 16% are

manufacturers, and somewhat less than one quarter (24.9%) are supplied by wholesalers that operate based on a Cash & Carry model.

If we consider the geographical area in which these supply establishments are located, we can see that, in Andalusia, just 17% of the suppliers are importers, whilst 9%, in addition to being suppliers, are also manufacturers. Meanwhile, in Madrid, the percentage of distributors is lower (12%) and the number of manufacturers is higher (22%), along with the percentage of Cash & Carry (32%) suppliers.

If we analyse the size of the establishment, we can see that the larger the size of the shop, the higher the percentage of traders who work directly with importers: 22% in the case of shops measuring less than 50 square metres and 38% in the case of shops with a surface area of more than 200 square metres.

These figures confirm the fact that all multi-product shops are supplied by wholesalers. Half of these wholesalers (51%) can be considered to be "pure wholesalers", which is to say, they only sell to retailers and, therefore, respect the traditional distribution channel.

Bazaars tend to be supplied by one or two general suppliers who offer them all kinds of products. The percentage of these rises in establishments located in the Madrid Region (67%), a figure that shows the higher degree of "dependence" on the part of Madrid-based traders with regard to their suppliers.

In relation to the breakdown according to nationality, we can observe that the majority of suppliers are Spanish (67%), followed by the Chinese (19.3%). Goods such as drinks, food products, decorative items and cleaning products are the products most habitually supplied by suppliers of Spanish origin.

Tough competition within the sector is cited as the main problem for more than 50% of multi-product outlets. Theft and assault are other problems mentioned by the majority of respondents. Administrative and bureaucratic difficulties, supply problems and financial problems (taxes, price of petrol ...) make up the rest of the issues of greatest general concern to multi-product shop owners.

Finally, we might highlight the fact that higher levels of competition within the sector and the fact that these levels are expected to rise still further are likely to determine the future development of a sector that is expanding rapidly.