Santa Cruz de Tenerife 7 Feb. (Europa Press) –
The Official Chamber of Commerce, Industry, Services and Navigation of Santa Cruz de Tenerife and Cajasiete unveiled this Friday the Bulletin of Commerce for the last quarter of 2024, a report indicating the ongoing decline of the commercial fabric, despite the Canary Islands once again leading sales nationally. Specifically, the annual average increase was 5.2%, whereas the national average growth was 2.1%.
During the press conference to present the findings, the Chamber’s general director, Lola Pérez, alongside José Manuel Garrido, the Director of Institutional Relations of Cajasiete, emphasised that the unemployment indicators, social security affiliation, business confidence, and sales levels are “excellent.”
However, she remarked that these figures “contradict” a reality they have been warning about for several months: “Not only are new companies not being established, which would be expected, but the Canary Islands concludes 2024 with a 1.2% decrease in the number of commercial companies registered with Social Security that have employees.”
Specifically, they noted that 169 shops closed in 2024, reducing the number of SMEs to 13,660, indicating a “deterioration” of the business fabric that remains “concerning,” particularly affecting retail trade, as 147 of the businesses that closed in 2024 were retail stores.
Closure of 1,200 commercial enterprises
Pérez explained that over the last five years, there has been the closure of 1,200 commercial enterprises registered with Social Security in the Canary Islands, representing 8.1% of the business fabric. In relative terms, La Palma experienced the most significant loss during this period, with an 11.4% closure rate (68 shops).
However, in absolute terms, Tenerife stands as the island with the highest number of closures, losing 572 establishments (8.1%). Gran Canaria saw the closure of 389 companies (6.6%); in Lanzarote, 93 (8.5%); Fuerteventura, 18 (2.4%); La Gomera, 14 (8.9%); and El Hierro, two (2.5%).
Additionally, according to data from the Central Business Board of Business, which includes companies without employees, there is a “steady decline” in the number of commercial enterprises.
Thus, they have decreased from 33,657 at the beginning of 2019 to just 26,213 shops at the start of 2024, the most recent available data. This reflects a reduction of 7,444 in just seven years, a trend that has undoubtedly accelerated over the past year.
In that context, the Chamber’s general director highlighted “the urgent need to establish specific measures for SMEs” to support their modernisation, as the technological revolution and their limited capacity to adapt are hindering their competitiveness.
Furthermore, changing consumer demands and the rise of e-commerce are additional factors at play.
The impact of reduced working hours
Another emerging “risk” factor, the Chamber adds, is the recently approved Draft Law on Reducing the Working Day, which includes a new working hours record that “could exacerbate the loss of companies, unable to cope with the increased economic and logistical costs this measure could entail.”
“We cannot overlook the fact that the commercial sector, alongside tourism, is one of the engines of our economy, contributing significantly not only in added value but also in employment, accounting for 18% of total employment in the Canary Islands at the end of last year,” Lola Pérez added.
She underscored the necessity to demonstrate its importance as an element that adds unique value to our productive system and society, fostering synergies with other sectors and revitalising our cities.
For his part, José Manuel Garrido highlighted the “very positive” data available, especially in light of the backdrop of uncertainty marked by geopolitical tensions, rising interest rates, and inflation.
“However, we are concerned about any fluctuation in these indicators, especially regarding the labour market,” Garrido remarked. “Employers are struggling to find suitable candidates to hire.”
Both Lola Pérez and José Manuel Garrido concurred, supported by the Newsletter data, on the resilience of the Canarian commercial sector. They asserted that consumer spend and demand have emerged as crucial drivers of economic growth in the Canary Islands, thanks to increased employment levels and greater tourist expenditure.
Concerning forecasts for 2025, a moderation in the consumer price index and reductions in interest rates are anticipated to enable the sector to maintain positive results.
44% of shops struggle to find staff
The Chamber points out that the Canarian retail sector continues to exert a strong influence on the labour market. Indeed, the Canary Islands rank as the second autonomous community with the best annual variation in the Retail Trade Occupation Index for 2024 (3.4%), only surpassed by Madrid (4.4%), and boasts the highest affiliation figure in recorded history.
As of December 31, 2024, the number of individuals affiliated with Social Security in the commercial sector was 169,363, representing an increase of 3,708 from the total registered at the end of 2023. This places it slightly behind Hospitality (171,347 affiliates) regarding overall affiliation numbers, with construction following at a considerable distance, ending 2024 with 59,700 Social Security members.
This employment data intersects with a “continuous decline” in the number of registered individuals in employment offices. By the end of December, there were 25,264 unemployed individuals within the commercial sector, representing a decrease of 1,804 year-on-year.
A labour reality that they define as facing “a significant limitation” in maintaining operations, specifically “the challenge of sourcing staff,” affecting 44% of businesses in the islands.
