Growth in the clothing and footwear retail sector increased only marginally in 2012, seeing growth of 0.8 per cent compared with 0.4 per cent growth between 2011 and 2010.
These figures emerged from the second edition of the Malta Retail Review undertaken by Deloitte and EMCS with the support of Bank of Valletta. The survey captured some 40 per cent of the clothing and footwear sector, which is estimated to be worth €175 million annually.
Deloitte financial advisory leader Raphael Aloisio explained that the results varied by location, with Valletta seeing the second consecutive drop in turnover of 5.4 per cent, after a decrease of 10.3 per cent the previous year. Half of the outlets in Valletta saw gains – compared with 61 per cent for all the locations surveyed.
“We have seen a shift from Valletta to Sliema – particularly to the Point – as well as from one brand to another within Valletta. Stakeholders need to get together and see how to reverse the decline in the capital city. If something is done, then I sincerely believe the situation could improve significantly,” Mr Aloisio said. The downturn is being attributed to construction works and parking restrictions but EMCS director Stefeano Mallia said “one should not assume that these were the sole causes and that tackling these issues would automatically restore normality.”
Sliema outlets saw growth for the second consecutive year, registering an improvement of 3.2 per cent in 2012 compared with 1.5 per cent the previous year. While Gozo, St Julians and other areas saw little change, Fgura/Paola lost 6.7 per cent of turnover, while Hamrun/Qormi/Other areas saw an increase of 8.4 per cent.
“We are seeing stable growth overall but with an increase in the number of outlets so this is bad news as it means that profitability must be under pressure,” he said, noting that future editions of the review would probably try to capture these statistics.
The review also revealed that mall operators increased their share of the market, growing at a faster pace than high street outlets, while own brands generally reported stronger performance than international franchise operators.
BOV’s executive hear for business generation Noel Scerri stressed the importance of stakeholders being provided with reliable market intelligence which would enable those involved to make more informed strategic business decisions.