Pay and the shopping basket: Spain versus the UK

Average pay: €22,000 in Spain versus £33,000 in the UK, according to the debate

A 310-gram jar of Tiptree tomato sauce costs £3.50 at the British supermarket Waitrose. Imported, the same product sells for €7.85 at El Corte Inglés. Two figures and one shelf are enough to open a comparison that resurfaces whenever someone pits a Spanish paycheck against a British one.

According to the figures used in the debate, the average Spanish salary is around €22,000 a year and the British one £33,000. The gap is real, which is why the conversation always starts there. Then come the shopping basket, rent, housing and even the price of tomatoes, and the simple arithmetic breaks down.

Pay doesn't explain it all: imported groceries cost more

The numbers being compared point to an uncomfortable pattern. A product made in one country tends to be cheaper in its own market. Tiptree sauce, British, costs £3.50 in the UK and €7.85 in Spain. Inés Rosales olive-oil tortas, Spanish, sell for €2.90 at El Corte Inglés and £3.05 at Waitrose. A benchmark French product appears at €5.50 in Spain and £3.15 —about €3.69— in the UK.

The reading is straightforward: imported goods carry a surcharge, and Spain imports a lot. The argument that “you eat better and cheaper here” holds up at the neighbourhood greengrocer and falls apart on the gourmet shelf, where the same jar of sauce costs almost twice as much. Why a product that travels thousands of kilometres arrives more expensive in one country than another has no single answer, and the exchange leaves it up in the air.

Why has food become so much more expensive in Spain?

Food prices in Spain have doubled in eight years, according to the series used in the comparison. The most repeated explanation is not imported inflation but a lack of competition: the Spanish retail market is said to work like an oligopoly in which a few groups set the pace and no one cuts prices to gain share.

The counterpoint comes from those who shop outside. Chains such as Lidl and Aldi are clearly cheaper than British premium supermarkets, but Waitrose, Sainsbury's and M&S are anything but cheap. A packet of Doritos costs £2.50 in the UK. It all depends on which shelf you compare and which neighbourhood you walk through.

How much does a British worker earn per hour?

According to a calculation circulating in the debate, the UK minimum wage is around £14 an hour. That figure would explain why so many look at gross pay and forget the rest. At £14 an hour, Waitrose's extremely expensive basket would stop hurting so much.

Housing eats up any salary advantage

There are towns outside London where a parking space is advertised for £100,000. A mid-range flat can cost two million in London or Geneva. Higher salaries evaporate when the mortgage arrives.

Purchasing power parity—PPP—is the usual tool for discounting that effect. Portugal, it is noted, sits just 20% below the UK in PPP terms. The conclusion of the coldest analysis is that the black hole in the comparison is neither wages nor the shopping basket but bricks and mortar. And some add a harder-to-measure factor: urban quality of life, with British cities bluntly singled out as worse to live in than Spanish ones.

The political rift that clouds the data

Much of the exchange drifts into ideological territory. One camp argues that Spain's problem is not resources but management and how people vote, and blames the political course of the past decade for its relative decline compared with other countries. Another responds that the decline comes from earlier and from higher up, and that the comparison with the UK is misleading because the starting point was never the same. The two positions clash with more vehemence than data.

The strictly economic question gets buried under that layer. The wage gap exists. So does the price of the shopping basket. What part of each is explained by politics, what part by geography, taxation or market size remains without a settled answer, and no after-dinner discussion is going to provide one.

The figure that throws you off is none of the big ones. It's a £100,000 garage, with no view, no light and in a city that isn't London.