Spanish Commercial Sector and Trade Dynamics

Internal Trade Dynamics in Spain

Internal trade is performed within the boundaries of the country. The location of trade depends on two primary factors:

• The existence of a transport system between the producer, trader, and consumer.
• The existence of a market with adequate purchasing power.

These factors contribute to the growth of urban neighborhoods and communities with good transport networks, while negatively affecting neighborhoods and small communities with low capital, such as Extremadura and Castilla-La Mancha.

The Commercial Revolution and Structural Changes

The structure of internal trade has undergone profound changes known as the "commercial revolution," which has affected several areas:

• Distribution Channels: The deletion of intermediaries.
• Consumption: Increased buying power due to higher income, though consumption patterns changed with the incorporation of women into the workforce.
• Distribution: The rise of self-service sales.
• Equipment: Implementation of data-phones and computers.
• Payment Methods: Use of credit cards and electronic purses.

Wholesale and Retail Trade Classifications

Wholesale Trade

Wholesale (or wholesale trade) concentrates and distributes products to retailers. Search sites for these operations are typically located near central production and consumption areas, such as Catalonia, Valencia, and Madrid.

Retail Trade

Retail (retailer) involves selling directly to consumers. There are two main types:

• Traditional Trade: Small establishments run by individual entrepreneurs with small staffs and obsolete equipment. This leads to low investment due to a lack of capital and economic hardship, resulting in a crisis. However, advantages include personal service and immediate accessibility.
• Modern Commerce: This includes hypermarkets, supermarkets, department stores, and regional malls that combine leisure activities with hypermarkets.

Business Areas and National Trade Policy

Business areas are constituted by geographical spaces where the population travels to an important town for non-essential purchases. In Spain, provincial capitals serve as the major shopping centers and areas.

Trade Policy Instruments

There are two basic instruments governing trade policy:

1. Framework Plan for Modernization of Internal Commerce (1995): Aims to increase retail competitiveness by improving professional qualifications, diffusing innovation, technological modernization, management planning, and business cooperation. It provides subsidies of up to 70%.
2. Retail Trade Act of 1996: This act implemented price freedom, regulated commercial trade, and liberalized various aspects of the opening hours for commercial establishments.

Foreign Trade and International Exchange

Foreign trade involves the exchange of goods and services between a country and the rest of the world.

• Exports: Sales of domestic products abroad. In this sector, primary products have been downplayed in favor of semi-finished industrial goods, equipment, road vehicles, and consumer goods.
• Imports: The purchase of foreign goods. Major imports include energy products, industrial goods, and agricultural products.

Trade Balance and European Union Integration

Spain's entry into the European Union (EU) significantly modified its external trade. The EU is now the main recipient of Spanish exports and the primary source of its imports. The trade balance shows a deficit for Spain due to the low competitiveness of certain products. While there is a trade deficit with Asia, Africa, and North America, trade remains favorable with Latin America.

Foreign Trade Promotion and Policy

Foreign trade policy is heavily influenced by the establishment of the EU Single Market and agreements signed with national commerce organizations. This policy attempts to promote Spanish business through various measures, including the organization of exhibitions, trade fairs, and institutional travel.