High hopes on the high street

Shop keepers are hoping that sales fever will grip the Balearics tomorrow morning when the summer sales finally start two weeks behind the rest of Spain. High street sales have taken a tumble this year and many stores are relying on a good response to the sales to help lift business. Despite risking heavy fines, a number of shops started offering summer discounts and special offers at the start of the month, coinciding with the traditional start of the sales nationwide. Only in the Balearics do the sales start later, in accordance with a controversial and unpopular decision by the local government. The theory being that with so many tourists in the Balearics in July, delaying the sales will enable traders to cash in on holidaymakers paying top prices. It was not the case last year and certainly will not be the case this year. And while there are less tourists, most dedicated bargain hunters, wise to the two week delay in the Balearics, have already done their sales shopping on the mainland. So even before the sales start, a sizeable chunk of the potential market has already disappeared. The results of the winter sales were poor, confusion over the euro did not help, although Brussels did recommend to countries with January sales to consider delaying them in order to reduce problems. All sectors of the Balearic economy have reported that takings and trade is down on the back of economic downturn in Europe and the slump in tourism in the Balearics. As a result, consumers are tightening their belts. On Friday Spanish tour operators and travel agents reported that they still have thousands of holidays unsold for July and August with the first signs of a price war about to break out on the high streets in Spain as tour firms try to off load their unsold stock. The Balearic government has been keen to tip-toe around the word recession, although a decline in economic growth can not be ignored as the cost of living continues to rise, forcing consumers to sit tight.