Restaurant sector generates sales of €289.5m in 2010

The restaurant sector in Malta generated a total of €289.5 million worth of sales in 2010, of which two-thirds were attributed to local customers, according to the latest NSO statistics.

When it comes to profits these declined by over 50 per cent in 2010 when compared to 2008, a particularly good year for the restaurant sector

Figures show that dining out at local restaurants has remained a popular entertainment choice for the Maltese, making this sector an important contributor to the economy.

An analysis of official NSO data shows that almost 80 per cent of respondents in a survey (aged 18 and over) stated they regularly frequented local restaurants. This figure increases to 93 per cent among those aged between 25 and 34 and slightly higher among those between the age of 18 and 24.

Restaurants also remain an extremely popular choice for those within the 35-44 age bracket with 91 per cent naming restaurants as a top leisure and entertainment choice, but their popularity starts to decrease slightly among those aged 45 and over.

According to the NSO, the restaurants sector last year employed a total of 2,663 employees on a full time basis and another 1,137 on a part time basis, which equates to €45.3 million in wages, representing 1.7 per cent of the country’s total wage bill.

The restaurant sector last year paid a total of over €4 million in taxes on income, and over €9.1 million in social security contributions. The consumption tax paid on restaurant sales generated €52.1 million of revenue to the government, equivalent to 10.8 per cent of total VAT revenue.

When it comes to profits however, these declined by over 50 per cent in 2010 when compared to 2008, a particularly good year for the restaurant sector. NSO statistics show that, not only have profits for restaurants been declining over the years, but when compared to other relevant destinations, restaurants in Malta have always ranked among the lowest when it comes to profitability.

“Such a decline is mainly the result of high operating costs, the effects of the high value of real estate, the high dependence on weekend business and the lack of a critical mass to sufficiently cater for the large number of restaurants that exist in Malta,” a spokesman for the Malta Hotels and Restaurants Association told The Times Business.

The spokesman also said that the MHRA and the Malta Tourism Authority have commissioned an in-depth study on the state on the restaurant sector in Malta.

“The purpose of this study is to identify issues affecting the restaurants industry so that that policies can be drawn up to guide its development for the years to come, in order to make it more competitive and sustainable in the long term,” he said.