Why a ban on sales in Spain’s shops could spell disaster for small businesses in Mallorca

LOCAL business owners in Mallorca have been left enraged after the Minister of Health, Salvador Illa, said that sales would not be allowed to take place in shops.

The central government had caused much confusion earlier this week after publishing an additional provision in the Official State Gazette (BOE).

This stated that ‘establishments may not announce or carry out commercial actions that may lead to crowds of the public, both within the commercial establishment and in its vicinity.’

It also went on to detail that this rule would not apply to sales or promotions made on a website – in other words, sales are prohibited in physical stores, but are allowed online.

Causing anger among merchants who are already struggling to keep their business afloat due to the COVID-19 crisis, they demanded that the central government release an official statement to clarify the rule.

Yesterday evening, Illa put an end to the confusion, stating that sales are strictly prohibited as they can generate crowds, thus posing an increased risk of contagion.

However, Illa’s statement has infuriated merchants and business associations across Mallorca, who say the ban will lead to the death of many small to medium size businesses (SMEs) which have already accumulated significant losses as a result of stores being closed for almost two months.

According to Toni Fuster, the president of PIMECO, as a result of the lockdown, SMEs have seen collective losses amounting to €120 million.

This he largely attributes to the loss of tourists who account for 60% of sales in the city’s shops.

Jordi Molina, who owns a small shoe shop in Sindicato in Palma de Mallorca, told the Olive Press that if he cannot put his stock on sale, he may be forced to close.

He said: “I have not earned any income for two months and the only way to entice clients is through sales.”

Molina explained that in his opinion, people do not have any money due to being out of work during the health crisis, and that offering discounts on products may be the only way for them to part with their money.

Zara Adler, a manager at Xarig Perfumeries in the capital, also believes that not being able to offer sales will negatively impact their business, and that the ‘government’s ever-changing decisions are confusing us all.’

Both also claimed that the new provision favours large corporations, such as El Corte Ingles, which have the capacity and funds to operate online.

This was echoed by the president of the Federation for Balearic Business Entrepreneurs (AFEDECO), Antoni Vilella, who called the provision ‘absolute nonsense’ which has ‘generated huge discomfort in the sector.’

He said: “There are thousands of families that depend on the commercial sector, so to be playing with their future in such a frivolous way is wrong.”

He continued that merchants ‘are the first to want health security,’ shown by their efforts to ‘adapt their premises to the new reality’ and ‘by making extra investments to guarantee virus-free spaces.’

Vilella’s sentiments were backed by the General Director of Commerce in the Government of the Balearic Islands, Miguel Jose Pinyol, who said that he has interpreted the provision to allow sales, both in store and online.

According to Pinyol, the ministry’s order only applies to large store openings or promotional campaigns such as Black Friday, but not for a small establishment that decides to make discounted offers to their customers.

Despite the conflicting statements made in both the central and autonomous government, what is certain is that the confusion needs to be put to bed in order for Mallorca’s SMEs to move forward.

Photography by Allan Binderup