In 2024, Spanish households reduced annual food spending by 6.3% to a median of €6,000, while vehicle purchases rose 10.6% to €7,300, according to the Bank of Spain’s Financial Survey of Households, signaling a significant shift in consumer priorities amid persistent inflation and evolving mobility trends.
The Bottom Line
- Declining food expenditure reflects sustained pressure on disposable income despite nominal wage growth, with real household consumption still below 2019 levels.
- The surge in vehicle spending suggests pent-up demand and shifting preferences toward personal mobility, potentially benefiting automotive manufacturers and related supply chains.
- This spending divergence complicates inflation forecasting, as services inflation remains sticky while goods inflation shows signs of moderation.
How Food Deflation Meets Auto Demand: The Dual-Track Consumer Shift
The 6.3% drop in food spending—equivalent to €400 less per household annually—occurred despite food inflation averaging 3.1% in 2024, implying a volume contraction of approximately 9.1% in real terms. This contrasts sharply with vehicle spending, which rose in nominal and real terms, suggesting consumers are prioritizing durable goods over non-discretionary essentials. The trend aligns with broader Eurozone data showing a 0.8% quarterly decline in real food consumption through Q4 2024, while durable goods consumption grew 2.1% over the same period, per Eurostat.
Such a divergence has measurable implications for corporate earnings. Carrefour SA (EPA: CARR), which derives ~30% of its revenue from Iberian operations, reported flat food sales in Spain for FY 2024 despite price increases, attributing the performance to “mix shift and volume softness” in its annual report. Meanwhile, Stellantis NV (NYSE: STLA) reported a 12.4% increase in Western European vehicle registrations in 2024, with Spain contributing disproportionately to that growth, citing strong demand for SUVs and electric models.
“We are seeing a clear bifurcation in consumer behavior: essentials are being squeezed while big-ticket items, particularly those tied to mobility and leisure, are experiencing a post-pandemic catch-up phase.”
Inflation Dynamics and the Policy Response Lag
The Bank of Spain’s survey, released in Q1 2025 but reflecting 2024 outcomes, highlights a lag in how inflation metrics capture behavioral shifts. While headline HICP inflation in Spain averaged 3.4% in 2024, the divergence between food and durable goods suggests that traditional baskets may overstate cost-of-living pressures for households redirecting spending. This nuance is critical for the European Central Bank, which maintained its deposit facility rate at 4.0% through early 2025 despite declining goods inflation, citing persistent services inflation and wage growth.
Real disposable income per capita in Spain grew just 0.7% in 2024, according to the National Statistics Institute (INE), insufficient to offset the cumulative loss of purchasing power since 2021. Yet, auto financing remained robust: new car loans in Spain grew 8.9% YoY in 2024, per the Bank of Spain’s credit statistics, indicating that households are accessing credit to sustain big-ticket purchases even as they cut back on groceries.
Supply Chain and Retail Sector Reactions
The shift is already reshaping retail strategies. Mercadona, Spain’s largest grocery chain with ~25% market share, reported a 1.2% decline in comparable store sales in Spain for FY 2024, though it maintained EBITDA margins above 7.5% through private-label expansion and cost control. In contrast, automotive retailers like Grupo Salvador Caetano (private) reported double-digit growth in used and new vehicle sales in Iberia, with used car prices rising 5.3% in 2024, according to GANVAM, the Spanish vehicle dealers association.
This dynamic has as well influenced logistics. Freight volumes for food products declined 4.1% in 2024, per ADIF cargo data, while vehicle transport increased 6.8%, reflecting the spending shift. Analysts at JPMorgan Chase & Co. (NYSE: JPM) noted in a February 2025 report that “consumer staples logistics providers face headwinds from volume decline, whereas auto-linked supply chains are experiencing renewed investment in just-in-time distribution hubs near urban centers.”
“The consumer is not retreating—they are reallocating. What looks like austerity in the grocery aisle is often funding a vehicle upgrade or a move to suburban living.”
Table: Household Spending Shifts in Spain, 2022 vs. 2024
| Category | 2022 Median Spending | 2024 Median Spending | Change |
|---|---|---|---|
| Food and non-alcoholic beverages | €6,400 | €6,000 | -6.3% |
| Purchase of vehicles | €6,600 | €7,300 | +10.6% |
| Total household expenditure | €28,500 | €28,200 | -1.1% |
The Road Ahead: Implications for 2025 and Beyond
Looking forward, the sustainability of this spending split depends on interest rate trends and labor market resilience. With the ECB expected to begin rate cuts in Q3 2025, auto financing costs may decline further, potentially sustaining vehicle demand. However, if food inflation remains above 2.5% and wage growth fails to accelerate, the pressure on essential spending could intensify, increasing the risk of payment defaults on revolving credit.
For investors, the divergence presents a sectoral rotation opportunity: underweighting food retailers and overweighting automotive manufacturers, mobility services, and consumer discretionary names with Iberian exposure may offer relative value. Yet, any prolonged weakness in food consumption could signal deeper structural issues in household balance sheets that would eventually spill over into durables.
*Disclaimer: The information provided in this article is for educational and informational purposes only and does not constitute financial advice.*
