While the General Retailers’ and Traders’ Union (GRTU) falls short of being optimistic on what shops will be left with in their tills after Christmas, three main street shop owners giving their comments on how they are faring this Christmas were surprisingly positive.
Discount store giants Tal-Lira for example, have kept up with last year’s sales this Christmas in spite of a general 14 per cent slash-down on all products introduced as soon as we joined the Euro last January.
“We foresaw a 14 per cent loss for this year, but in spite of having lowered our prices – we witnessed no decline in our profits this Christmas season,” said Tal-Lira Financial Controller Vanessa Farrugia.
“This Christmas is as busy as usual and the economic situation is not impacting on customer walk-ins. The only noticeable decline in custom was last Thursday, but that was clearly because of bad weather – which does not happen every day.”
In no way did Farrugia deny that the general economic climate is bleak. She claimed Tal-Lira still stands strong because of intelligent purchasing.
“We sell day-to-day items and products which people ultimately need. If we had to sell cars I’m sure it would be a different story, but our products appeal to a large chunk of the population because they are items people demand – like food, which as we know, us Maltese love.”
On his part, café heir John Cordina, of Cordina Caffe fame, said he has not witnessed any impact that is directly attributable to the current economic situation, or at least not so far.
“Our situation in Malta is very different,” Cordina told Business Today. “In general terms, I think the country will be hurt if we feel a crunch in the tourism sector, and that is where my business may suffer. But mind you, people will still travel. If you’re in England and want to go on a weekend break, you will most probably look for a sunny place and Malta never fails to be attractive in this regard – with or without credit crunch. I have spoken to various ministers about this. If we are to avoid serious repercussions due to a slump in tourism, we have to start with the little things – like ensuring a mention on weather reports of major TV stations. Sky News for example, will talk about sunny weekends in Tenerife or Palermo – but Malta is never mentioned.”
High-street fashion chain Zara prepared for economic turbulence by lowering their prices this year, but in spite of a 20 to 30 per cent slash-off on their children’s section and cheaper articles, Christmas this year is proving to be better for them on all counts.
“We have not only sold more pieces but also had higher sales values,” said Zara’s financial controller Malcolm Camilleri. “On an international front, Zara is in a very good position to face the economic turmoil because of a good cash flow and zero debt. We managed to secure better prices from our suppliers abroad – but have launched no discounts whatsoever. In any case, it is our superiors abroad who decide on discounts, we have no say in the regard. They also determine prices.
“We never advertise either, which goes to show that we are growing because we have a good product, regardless of the credit crunch,” he said.
Attempts were made in contacting other key players in the fashion, tourism and HORECA sectors but respondents were not in a position to answer our questions.
While the feedback we got from the horses’ mouths was generally positive, GRTU Deputy President Philip Fenech begs to differ.
“It’s very much of a mixed scenario,” Fenech said. “Some shops have already started with discounts, some are saying that business is extremely slow and that there is no sign of Christmas, while others have slowly started gaining momentum. A few are saying that they are on par. However, a lot of shop owners are telling us that business is very slow this Christmas.”
Fenech also remarked about mixed perceptions that are impacting the market in an unpredictable fashion.
“Some people have already lost their part time jobs because of the crisis, so there will be less expenditure or sure in that case. Others are worried, although it hasn’t really hit them yet. Some areas have already been badly hit – tourism is a case in point, as occupancy levels prove,” he said.
Asked about the positive perception of the market leaders interviewed by Business Today, Fenech argued that “some businesses will be affected in the first cycle, some others in a second cycle and some others in a third.”
“In fact, we are already seeing a number of Christmas sales and slashed down prices – and this already goes to show that business people are aware of the situation and are working hard on re-instilling consumer confidence. Other countries in Europe have reacted in exactly the same way.”
Drawing another comparison to other European countries, Fenech said that numerous people in Malta “have been badly affected by their investments. Some investments were lost and some that have been impacted in value or return.”
