Making a virtue out of necessity
In a two-part feature John Cassar White looks for evidence on how the Maltese are coping in the current economic slowdown. In this first article he examines the changing consumer behaviour of households. In the second article to be published next week he looks at how businesses are handling the situation.
How are the Maltese households coping with the current unfavourable economic climate? In the absence of good quality consumer behaviour research, one can only best rely on anecdotal evidence gained from talking to various people with their feet solidly on the ground, and who try to be as objective as possible in looking at the whole picture, rather than a small detail in it.
By far the most important element of every household's budget is the food and drinks bill. Of course, the impact of this item on family finances is not the same for everyone. People on a low income spend a higher percentage of their income on food, than do those with a stronger financial basis. A look at the parking places of low-cost supermarkets convinces me that more and more well-off families, who drive cars in the top end of the price range, are shopping at these budget outlets.
They may complain that the range of products available may not be as large as can be found in other supermarkets, but are happy saving some euros by buying perfectly good quality products at a 20 to 30 per cent discount from the prices they are used to paying. They are also getting used to buying non-branded store foods that present a better value for money.
Whether we will see the development of consumer advice on how to buy and consume healthier foods at budget prices, remains to be seen. In Ireland, for instance, the Dublin Nutrition Centre and the Dieticians Institute are providing information through the media and their own website on how families can cut their food bills by avoiding expensive junk food, and cooking healthy low-cost but nutritious food. Some tell me that the Maltese would resent such a patronising attitude if anyone ever thought of making a national campaign on this issue. I do not quite agree with this assessment.
Transport is another high-cost item in the family budget. In families with two adults in employment, normally one would use public transport to get to and from work. The complaints about the quality of our public transport system persist despite various attempts for reform in the last several years. There is little evidence so far of travellers resorting to public transport to save on fuel costs. The roads continue to be jammed with traffic at peak hours and parking space is still very difficult to find in town centres.
I have recently started using public transport again because the justification for the use of such a cost-effective means of transport is so logical. However, I have to admit that the quality of service has not improved much, if at all, in the last 40 years. One just hopes that the most recent attempt to reform the public transport system by liberalising the market and rethinking the routing of public transport is successful. An efficient and reasonably priced public transport system in such a small island could greatly ease the pressure on families trying to make a virtue out of an economic necessity.
As can be expected, expenditure on entertainment is one of the main victims of the current economic downturn. Most families have not given up on their weekly outings to restaurants, but their choice of venues seems to be changing. The outlets that cater for the business community who charge their bills to the office expenses account have apparently not been suffering too badly. Many would argue that it is in times like these that business people need to pamper their clients even more emphatically. At least this logic eliminates some of the guilt that can affect those who find delight in wining and dining with their business friends, when many fear for their jobs.
However, family outings are today being either limited to occasional events, or else families are opting to downsize by going to low cost eateries that offer better value for money, although the culinary delights may not be too impressive. This phenomenon, I have been told by a restaurant owner, is affecting a number of young, and not so young, workers who earn a few extra euros by moonlighting as waiters during the week. The first economic measure adopted by restaurateurs when the business is slow is the reduced use of part-timers.
Entertaining family and friends is apparently becoming a popular and perfectly respectable custom again. A hobbies and toy shop owner I spoke to recently confirmed to me that the trend that is becoming very evident in the UK for the sale of board games, is steadily gaining strength even in Malta. Games like Monopoly and Scrabble will no doubt feature in the gift list of many Maltese families.
I have been reassured by my friend that it is not just kids that want to play with fake money pretending to be millionaires. It seems that adults too are making an enjoyable virtue out of necessity.
By far the most important element of every household's budget is the food and drinks bill. Of course, the impact of this item on family finances is not the same for everyone. People on a low income spend a higher percentage of their income on food, than do those with a stronger financial basis. A look at the parking places of low-cost supermarkets convinces me that more and more well-off families, who drive cars in the top end of the price range, are shopping at these budget outlets.
They may complain that the range of products available may not be as large as can be found in other supermarkets, but are happy saving some euros by buying perfectly good quality products at a 20 to 30 per cent discount from the prices they are used to paying. They are also getting used to buying non-branded store foods that present a better value for money.
Whether we will see the development of consumer advice on how to buy and consume healthier foods at budget prices, remains to be seen. In Ireland, for instance, the Dublin Nutrition Centre and the Dieticians Institute are providing information through the media and their own website on how families can cut their food bills by avoiding expensive junk food, and cooking healthy low-cost but nutritious food. Some tell me that the Maltese would resent such a patronising attitude if anyone ever thought of making a national campaign on this issue. I do not quite agree with this assessment.
Transport is another high-cost item in the family budget. In families with two adults in employment, normally one would use public transport to get to and from work. The complaints about the quality of our public transport system persist despite various attempts for reform in the last several years. There is little evidence so far of travellers resorting to public transport to save on fuel costs. The roads continue to be jammed with traffic at peak hours and parking space is still very difficult to find in town centres.
I have recently started using public transport again because the justification for the use of such a cost-effective means of transport is so logical. However, I have to admit that the quality of service has not improved much, if at all, in the last 40 years. One just hopes that the most recent attempt to reform the public transport system by liberalising the market and rethinking the routing of public transport is successful. An efficient and reasonably priced public transport system in such a small island could greatly ease the pressure on families trying to make a virtue out of an economic necessity.
As can be expected, expenditure on entertainment is one of the main victims of the current economic downturn. Most families have not given up on their weekly outings to restaurants, but their choice of venues seems to be changing. The outlets that cater for the business community who charge their bills to the office expenses account have apparently not been suffering too badly. Many would argue that it is in times like these that business people need to pamper their clients even more emphatically. At least this logic eliminates some of the guilt that can affect those who find delight in wining and dining with their business friends, when many fear for their jobs.
However, family outings are today being either limited to occasional events, or else families are opting to downsize by going to low cost eateries that offer better value for money, although the culinary delights may not be too impressive. This phenomenon, I have been told by a restaurant owner, is affecting a number of young, and not so young, workers who earn a few extra euros by moonlighting as waiters during the week. The first economic measure adopted by restaurateurs when the business is slow is the reduced use of part-timers.
Entertaining family and friends is apparently becoming a popular and perfectly respectable custom again. A hobbies and toy shop owner I spoke to recently confirmed to me that the trend that is becoming very evident in the UK for the sale of board games, is steadily gaining strength even in Malta. Games like Monopoly and Scrabble will no doubt feature in the gift list of many Maltese families.
I have been reassured by my friend that it is not just kids that want to play with fake money pretending to be millionaires. It seems that adults too are making an enjoyable virtue out of necessity.