Lidl By Lidl (13 November)

The people of Campos have never known anything quite like it. They’ve finally got a supermarket, or at least this is the impression one gets. I confess to not being intimate with the details of supermarkets in Campos and its neighbouring Ses Salines, but one shopper was reported as saying that she wouldn’t any longer need to trek off to Al Campo.

I do rather suspect that there were already other supermarkets, but what there wasn’t, was a Lidl. There now is. And the astonishing thing is that every time a new Lidl store opens in Mallorca, it becomes not just a news event but also an occasion of such magnitude that, as with the opening of Lidl’s Alcúdia store in October last year, it is comparable to days of yore when the train first arrived.

The Campos shop is number thirteen in a series of twenty Lidls that will be dotted about the island. Slowly but surely, little by little, Mallorca is succumbing to a process of Lidlisation; Germanic commercial empire-building. Well, it makes a change to the Chinese emporia I suppose.

Lidl has benefited from relaxations to land rules that have permitted greater commercial property development. While the rest of the economy stumbles along, the supermarkets are booming. With their value for money, they are to be welcomed, though their impact in terms of employment is only quite small; the Campos store apparently received 3,000 CVs for the 30 jobs on offer. Mallorca, as I quoted recently in a different context, that of tourism, is getting itself more, but not so many, McJobs.

Despite feeling that Lidl wasn’t breaking entirely new ground in propelling Campos into the modern shopping era, the excitement surrounding its arrival does remind one of times past when there certainly weren’t such things as supermarkets. I can’t speak for Mallorca, but the supermarket first came to town some time in the mid-60s. It was a Sainsbury and it offered a whole new self-service and time-saving mode of shopping for the upwardly mobile housewife that its previous store hadn’t.

The old Sainsbury was a place of personal service and lengthy queues. It was also a place that was so outmoded that its walls were decorated with enamel dark-green tiling. If it hadn’t been for the cheese, the loose tea and the pound of sausages, it could have been mistaken for a public lavatory.

Back in the day, and prior to the moment the Sainsbury family was good enough to cash in on the new consumerism of the sixties, shopping was distinctly inconvenient but was, courtesy of shops’ quirkiness and even smells, infinitely more inclined to leave an impression than the monotony of the modern-day barn.

Just two of these shops in our local village were Underwoods, the ironmongers, a general store packed to the gunwales with all manner of rubbish and which had an alarming and potentially disastrous smell of paraffin and paint-stripper, and the grocers, that owned by Mr. Cutt.

It was Mr. Cutt’s misfortune to have a garage that backed onto our garden and my sandpit in particular. It was doubly unfortunate that, rather than brick, it was made of far from substantial wood. The temptation for a seven-year-old hooligan with a nicely sharp-edged spade was way too great. Thus started my vendetta with Mr. Cutt, one that was to take in my stories as to our flopsy, who did mysteriously disappear one day, being served up on his meat counter and to the awful things he actually did with his bacon-slicer.

It was probably as well that we moved not long after but also a shame that I had come to be barred from the shop, as that bacon-slicer was always a point of fascination. And the smell of bacon was what hit you as soon as you entered the place. It was the evocative smells that contributed, pre-supermarkets, to what were old curiosity shops.

The point is that in Mallorca you don’t have to ever go into a supermarket. Everything still exists in a way that it did in deepest Surrey in the early 1960s. Some ferreteria are just like Underwoods. Stocked to the rafters, ramshackle and utterly mad. There are delis by the ham loads. And then there are the markets.

Little by little, the Lidls and others take it all away. I’m not complaining. But, inconvenient or not, the individual shops retain the character, the quirkiness and the smells that transport you back decades. Just for one day perhaps, forget the supermarket and do these individual shops in the local towns. But if you see any rabbit … .

China In Your Hand

Here’s an illuminating fact. In just one month, October of last year, the volume of Chinese products that were bought in Mallorca was double that for the whole of the year 2000. The Chinese invasion, that can be seen in the growth of the number of shops selling cheap products, shows no sign of slowing down. While crisis forces others out of business, Chinese businesspeople step in and snap up premises. The Chinese population in Mallorca, now just over 4,000, is only around a quarter the size of the British, but it is also growing and is different in one respect – the Chinese do not come to Mallorca to retire; they come to work and to run businesses. Period.

What has brought the Chinese invasion about? There is a commonly held belief that Chinese businesses enjoy tax breaks. Though you will find many a reference to tax holidays for five or seven years, there is also ample evidence to suggest that these are something of an urban myth. The director of the Spanish confederation of small to medium-sized business organisations is one who disputes the idea. The tax office has also denied that such assistance exists. Where help, of a governmental nature, is available, it is more likely to come from the Chinese Government in the form of a grant.

Why would the Chinese offer financial assistance? One reason lies with the need for a sort of economic “lebensraum”, an acknowledgement of China’s domestic inability to satisfy employment and business opportunities. Another is that it is a form of economic imperialism, which may not be far from the truth.

It is the fear, real or not, of an economic army marching on Mallorca and Spain, allied to the tax-break story, that helps to fuel some of the xenophobia directed towards Chinese businesses. Business organisations maintain that there is no “war” against the Chinese entrepreneurs, but complaints about their practices are rising as quickly as new shops open: complaints as to the legality of premises, as to proper licences, as to the quality of products and as to the hours that are worked.

Anxiety as to what is perceived as favourable treatment of Chinese businesses has been heightened by what might otherwise be seen as good news for Spain: ever closer economic ties between Spain and China, as evidenced by trade agreements signed last week. There is also the matter of the Chinese Government holding, via the Bank of China, some 10% of Spanish debt.

What should be seen as generally positive is not. Rather, it is looked upon in some quarters as Chinese expansionism, with Spain as its main foothold in Europe. It’s the idea of economic imperialism again, and the Chinese bazaar or restaurant on the high streets of Mallorca’s towns is the foot soldier for Beijing’s imperial palace.

These fears and anxieties, the “denuncias” for alleged infractions and the rest can themselves be seen as disguising the fact that local businesspeople simply can’t get their heads around how the Chinese operate. The suggestions of financial favouritism ignore systems of family support for arranging funding for businesses and for sharing debts and also what in certain instances can be a pyramidal system of investment. The charges as to low prices and therefore – perish the thought – aggressive competition overlook the presence of vast warehouses on the mainland that supply Chinese businesses and also the existence of some local networks of businesses co-operating in purchasing in bulk. The complaints as to long hours being worked, despite working-hours agreements in employment law and orders as to opening hours, are symptomatic of the unpalatable truth that the Chinese function according to a work ethic which is alien to many a Mallorcan.

There is more bad news for Mallorcan businesses which have laboured for too long not labouring long enough and being largely immune to real competition. This is the emergence of Chinese brands, especially in the clothing and footwear sectors. Mulaya is one such and it, along with others, is growing in terms of its outlets and taking on the likes of Zara.

For all the angst about high prices in Mallorca, the Chinese businesses are doing their part to dispel it. They should be welcomed, and increasing numbers of consumers are welcoming them, but xenophobia and lack of local competitiveness combine to try and put obstacles in their way. Not to me, and not, I imagine, to many of you, as we walk home with some China in our hands.

Any comments to andrew@thealcudiaguide.com please.

Is The Price Right? Yes and no

What was I saying yesterday? The year has barely started and the recurring theme of prices, their alleged excessiveness and their control is already being aired. As every year. And as ever, the discussion is littered with anecdotal evidence that can be cited to support an argument of excessive prices. My personal favourite remains the one about the cost of a packet of paracetamol. Five euros at a supermarket, lamented a tourist letter-writer. An example of rip-off Mallorca. Yes, it was a rip-off, but more importantly the supermarket had no right to be selling the drug; the example was the right symptom but the wrong diagnosis.

For all the talk of high prices, the Balearics’ consumer price index is one of the lowest among the regions of Spain. The most recent data related to price increases, those for November, show that the Balearics’ increase was in the lower range. Statistical information, though, does not give the whole picture, certainly not when anecdotes can be dragged out to contradict it. For the most part, the debate is biased towards individual experiences of price, be it for a meal, a coffee, this or that product which are then used as a basis for a call for someone to do something; this something often being the demand for price control.

Price regulation does exist to an extent. In the case of tobacco, for example, it is not only prices that are subject to control; so also is the distribution chain. It is an example of price regulation that might be said to work. It doesn’t create a shortage of supply or any obvious black market, two disadvantages of price control in the form of a price cap. Generally, as with the control of all medication through chemists alone, the market mechanism functions to the benefit of the consumer, eliminating any need for a more liberalised market.

Could a price-control approach be applied more widely? To the bar and restaurant sector, for instance? It’s hard to see how. Unlike the sale of tobacco through the licensed tobacconists, bars and restaurants are too diverse. Even items such as a coffee are far from being homogeneous. There are too many types of coffee, too many types of bar in too many different locations with too many different circumstances.

Price controls can bring with them certain downsides. One is a loss of quality, assuming the cap is set too low (and set too high would make a nonsense of the attempt at control). Another is the sheer complexity and cost of enforcement. Yet another is that controls run counter to the principle of the free market which, by and large, Mallorca and Spain abide by. And the free-market element has an historical political factor. Current-day market liberalism is the culmination of dismantling any vestiges of what once existed under Franco – that of price control and centralised, statist regulation of most economic activity.

The market dictates, which is how it should be. That a coffee or a plate of steak and chips might seem expensive (or cheap) is the consequence. When President Zapatero, quizzed about the price of a coffee on Spanish television, gave his reply of 80 centimos, he also offered the caveat of “it depends”. And it does depend. Depends on the market and on the bar or restaurant owner being allowed to fix his own prices. If he gets them wrong, that’s his problem. No one else’s.

It is not for government to intervene where it has no right to intervene, and one thing that the local government can do little about is the in-built disadvantage of Mallorca in terms of its isolation and its limited resources, land most obviously. Nevertheless, it is here that government should be more involved.

The costs of this isolation cannot be underestimated. The director of the small to medium-sized businesses organisation (PIMEM) has said that transport alone adds some 30% to the cost of production in Mallorca. And transport cost applies both to businesses importing as well as exporting. For the local producers, they also have to factor in the cost of land.

The vice-president of the local chamber of commerce has called for an end to the speculative acquisition of industrial and commercial land that has pushed the average cost per metre to buy a plot and establish a factory to roughly six times as much as it would be in, for example, Aragon on the mainland or over a third more than in somewhere even more isolated, the Canaries.

A further pressure on cost comes from what PIMEM’s director has described as the “minimal installations for goods transportation at competitive prices and the lack of competition between shipping companies”. This, combined with other factors, goes a long way to explaining why there is a lack of competitiveness in Mallorca, which has seen its industrial base decline by nearly 30% since 2005 (far greater a decline than in any other part of Spain). It also goes towards explaining why certain prices in Mallorca, because of the island’s geographical competitive disadvantage, are what they are.

Any comments to andrew@thealcudiaguide.com please.

Intensive Uncared-for Units

“Look at all these places that are closed.” I had bumped into a mate in Puerto Alcúdia. There were a number of “locales” that were empty. The tell-tale signs of abandonment were clear – whitewashed glass, mail piling up on the floors inside, fraying posters for this and that fly-billed onto the exteriors. “Yea, but they’re units under the apartments. It’s no wonder. They stick these places up, and on the ground floor they always have ‘locales’. There’s just too much of this stuff.”

Too much. Too many bars or cafés, too many shops. There is too much of everything. Too little of what matters. Demand.

The economic crisis has served to highlight what should have been obvious – the over supply of bars and shops. Perversely, the crisis has not reduced the supply, it has seen it increase, thanks primarily to the units that sit, mainly empty, under residential buildings.

The reason for these units is the consequence of a land law in the Balearics, one that has not been adopted elsewhere in Spain. The law goes as follows. There has to be a limit to the number of apartments per building. Were the ground floor to also be used for residential purposes, the average size of all apartments would have to increase. A solution, that of making buildings lower, isn’t a solution when it comes to the owners of land who want to maximise their returns. Another would be to scrap the law on the maximum number of apartments, so long as their sizes do not go below a minimum.

One view in favour of ground floors being reserved for commercial use is that people simply don’t want to live on the ground floor. It’s an understandable view, but only up to a point. Not wishing to be on the ground floor may have more to do with where the buildings are constructed rather than with a reluctance per se to inhabit a street-level apartment: a thoroughfare in Puerto Alcúdia is probably a case in point. But even this ignores the fact that houses, of older stock, open out onto narrow pavements right next to busy roads all over the island.

The downside of the regulation, apart from adding to the unnecessary supply of units, is that the buildings end up creating an impression of reducing desirability rather than the one that you would hope they would – that of increasing desirability. And this applies not just to the building itself but also to the general environment. Empty units benefit no one, but the mystery is why anyone thought that they could keep being created and keep being filled. Where they have been occupied, and some have been in Puerto Alcúdia, they have then become unoccupied. The crisis is not solely to blame; there is just no point to most of them.

The surfeit of bars and cafés should be enough to make any prospective tenant of the under-apartment “locales” wary of handing over his traspaso or, if he has any sense, just the rent. Other types of commercial exploitation should be met with a far bigger “buyer, beware” sign. What, for the most part, have they been? Fashion shops, if Alcúdia is anything to go by. They might also have been gobbled up by the johnnies-come-lately of the estate agency world, but the carnage in this market has robbed the units, as it has the island’s high streets in general, of their absurdly excessive presence. For the fashionista chicas who take on a unit, there is something else to bear in mind, not just the fact that their shops are an irrelevance. This is the relaxation of rules on commercial centres. Out of town, in other words. The pointless units become even more pointless as consumers shift their own centres of operation.

The law needs to be changed, but any reform should be more fundamental in terms of more coherent appraisals as to the style of towns such as Puerto Alcúdia where residential and commercial building has created a functionalist mish-mash of architecture. Attention should be paid to greater harmony in terms of the look of buildings and also to the introduction of semi-pedestrianisation. This might, for example, enable the apartment blocks to be shielded by gardens at their entrance, enhancing their appearance and greening the dominant and characterless sense of concrete.

If a change means the government and town halls interfering with the market and telling owners that the ground-floor “locales” have to go, that they have to stick to reasonable prices and they lose the rents from the units, then so be it. They’re not gaining rents as it is, while everyone else is losing out.

Any comments to andrew@thealcudiaguide.com please.

Open All Hours

A familiar – very familiar – gripe about Palma is that it is normally shut. Great hordes of tourists would otherwise descend on the Mallorcan capital, handing over large amounts of folding notes in a binge of around-the-clock eating, drinking and shopping. Well, that’s the rather hopeful theory. The practice is quite different. Especially at weekends.

Whether a less rigid application of opening hours, or more aptly closing hours, would make much difference to tourism is something of a moot point. Nevertheless, the intrusion of siesta shutting and non-opening after Saturday lunchtime do both seem somewhat anachronistic to visitors, in particular those now conditioned to liberal opening hours, e.g. the British.

One thing that the tourism minister mentioned in the interview I referred to yesterday was that there needs to be a change in terms of attitudes towards working hours and practices. There does, she argues, need to be greater flexibility, and she is absolutely right. And Palma needs such a change more than anywhere, but one could also lump in the major resorts as well.

With this in mind, there was a not uninteresting piece in “The Diario” yesterday which looked at the development of 24-hour Palma. It may have gone unnoticed by many, but the capital is shifting towards the type of model familiar to those who visit or live in capitals and major cities elsewhere. Over the past ten years, so the article explains, there has been a growth in the number of establishments which are open all hours or nearly all hours (closing only for a couple of hours to clean up). These include restaurants, pharmacies and bakeries. They may not include shops, but something has been stirring, and it might also be illuminating to note that one of the more popular places is one serving burgers and tex-mex (they’d love that news in certain parts of the island, e.g. Puerto Pollensa – or possibly not).

The obstacles to more liberal hours of working and opening are obvious enough, and they come from the unions, church, some political parties as well as from entrenched attitudes that place service fairly well down the list of reasons to actually be in business. It is curious that when fiesta comes to town, along with the hordes, some places will choose to close. But more than this, is the attitude towards time. If a shop or bar announces that it will open at a certain time, then that is precisely what it should do. If an appointment is made, it should be for a particular time and not some vague “mediodía” or whenever, which often means that it is not met. The minister also referred to productivity. I’m not sure this word was being used correctly, but it was still appropriate to mention it; the loss of productivity because of the time malaise is incalculable.

An argument that has been trotted out over the past couple of years of “crisis” is that businesses should be prepared to be open much longer. It is an argument that I have sympathy with. The counter-view is that it costs too much, in terms of staff and energy, to do so, expenses that businesses can ill afford. It is also an argument one can sympathise with. But fundamentally, it boils down to attitude and to a greater focus on the customer and on service. It may be taking time for the message to get across, but in parts of Palma at least, it is.

Any comments to andrew@thealcudiaguide.com please.

Shut That Door!

Now, here’s a potential little treat, courtesy of the Spanish Government. Once again, thanks to Ben for giving me the heads up on what, this time, might just have some important ramifications for bars and shops. I say might because, as ever with some law in Spain or Mallorca, things are not exactly transparent. Maybe they are just not reported well, or maybe no-one really knows. Anyway, to cut to the chase. 

As part of its broader law on a “sustainable economy”, the cabinet agreed a measure at the end of last week that would impose certain temperature and humidity requirements on establishments such as bars. Moreover, this measure would also mean that doors which open on to the street (and presumably also a terrace) cannot be left open. This would require the installation of automatic doors that open and shut as customers and staff pass through. The point of this would be to maintain mandatory temperatures inside, and these are – no higher than 21 degrees in winter and no lower than 26 degrees in summer. 

Firstly, just read those temperatures again. The winter one seems ok, but the summer one? 26 is 79 in old money. That is fairly warm. Clearly, this all seems designed to cut back on air-conditioning use. While this measure would not make AC units obsolete, the investment that may have gone into them would now be open to question. And what is meant by summer? If the temperature inside is below the 26 degrees – naturally – in, say, May, do they have to crank the heating up? There are also any number of bars and restaurants that make a virtue of air-conditioning as part of their publicity. Not at 26 degrees they won’t be.

The confusion about what this all might mean is not helped by different references in reports. There is one suggestion that it may only apply in certain instances – administrative centres and cultural venues have been mentioned – but “El País”, for example, refers to the splendidly vague concept of “public spaces”, which can be interpreted as meaning anything and anywhere. There is also the reference to opening onto a street, so does this include terraces or doesn’t it?

If one assumes that this is intended to apply across the board, terraces, streets, whatever, you can begin to imagine the implications. Surely the government does not plan to have every single bar operating automatic doors. Or does it? Bars have enough on their plate without having to fork out for such systems. And then there is the ambience angle, ironically, as the measure is all designed to control ambient temperatures. Bars, restaurants, shops want their doors open. It shows that they – the bars – are open and that the interior and exterior are seamless.

Just think about the practicalities. Imagine a bar packed with sweaty boozers during a big football match. Doors closed, the temperature at least 26. They’ve got to be kidding. Maybe they really don’t mean every bar and in every situation, but you can’t be sure they don’t, and you can’t be sure that, in the pursuit of saving the planet and meeting a 20% target of reduced carbon emissions, they don’t intend it. But one has got used to legislation which is not as it may seem. The definition of evenings and noise in Mallorca, that law from the summer; well that seemed to mean one thing and then they said it didn’t, or more likely someone realised it was absurd and so they quietly put it to one side.

This measure does not yet have royal assent, but that’s a formality. As to when it might be implemented, don’t know. But if it is as broadly based as it might be, then I think you will be hearing quite a bit more about it.

We’re Tumbling Down

80%.

Following yesterday’s 100%, a fall of twenty per cent, but no less significant. Not 80% home-made, but 80% down, as in 80% less revenue. This was the admission from the owner of a shop, a branch of which is on the front line in Puerto Pollensa. Stop for one moment and think what that means. You shouldn’t need to think very long.

The economic malaise, especially that affecting the British tourist, was always likely to translate into a tough season for shops. More than places of food or drink, shops offer something purely discretionary, unless they are supermarkets or are selling underpants. The shop concerned is not alone. One nearby is reporting a similar tumble. Partly, this may well reflect the overwhelming Britishness of Puerto Pollensa. Another opinion is that there is a quasi-Club Mac-ist dumbing-down of PP, i.e. tourist stock with, in the main, less than bulging pockets. Even for places of food and drink, things are not universally rosy. Maybe there is some truth in the 60% decline at a well-known PP bar that helped to push a well-known bar owner to a breakdown.

There is a weakness in a place being essentially a one-product resort, as is the case with Puerto Pollensa. Contrast it with Puerto Alcúdia where there is a far greater diversity in terms of nationalities and relatively far greater numbers of non-Brits; the Scandinavians in particular are doing much to hold Alcúdia together, and reflect the historical importance of the Scandinavian market to the resort. Any one-product or largely one-product business is susceptible to adverse market conditions. And a mark of that one-product Britishness, it might be recalled, was reflected in advice to German tourists in “Bild” to give Puerto Pollensa a miss because it was a “well-known English holiday citadel” (4 June, 2008: Hans Plays With Lotte, Lotte Plays With Jane).

While bars and restaurants have long been potential victims of punters “doing a runner”, shops have their own problems in the form of what the trade likes to call “shrinkage”: shoplifting to you and me. It may not be peculiar to this season, but anecdotally there appears to be an increase. In a way, it is desperately sad. One shop owner in Alcúdia’s old town tells of incidents that previously were rare. One such involved a lady who went off with a bag. When tackled, she said that she didn’t have any money. A gift for someone back home, maybe? No money, so what to do? In the ensuing struggle, the lady did actually wet herself. Her camera was also taken from her, and she was told that she could get it back from the police. She did finally leave the scene with the bag, and presumably did not go and claim the camera.

More home-made
Coming back to percentages, my thanks to Ben for admitting to have been moaning in a Victor Meldrew-ish manner about the home-made claim for some years. He makes a good point in respect of an episode in a pub in England when the owner was challenged as to the home-made nature of the breakfast. Bacon, sausages and so on are prepared as opposed to being made, and prepared, moreover, on the premises, as opposed to the home. Theoretically, an establishment could make sausages or even go to the lengths of curing and smoking or whatever you do to turn Porky into bacon, but one suspects that this is not normally the case. And then one comes to the 100%. Could food be, for example, 85.7% home-made? It wouldn’t have the same ring, I guess. “Our burgers are 85.7% made in the home.” No, it wouldn’t work. It either has to be 100% or not, and I leave it to you to decide as to whether 100 or zero is the more meaningful number.

There is always the alternative, namely “hand-made”. This claim one does encounter from time to time. Much as it may sound like a Blue Peter exercise involving sticky-back plastic and your mum’s best table, it isn’t an altogether spurious claim. There are indeed restaurants where the chef slaves for hours over, for instance, the hand crafting of some ravioli. All good stuff, but invariably it costs an arm and a leg. Making by hand carries a premium; man hours, cost of, and all that.. Nope, if the price is right, I couldn’t really care less where or how it’s made. Bring on that tex-mex; yumm, yumm.